Economy

Eldorado buys Caesars in $17B mega casino deal

Eldorado buys Caesars in $17B mega casino deal”

The deal valued at $17.3 billion will create a gambling and entertainment giant.

The combined company will retain Caesars' name and own, operate and manage 60 casino-resorts across 16 states.

"Eldorado's combination with Caesars will create the largest owner and operator of US gaming assets and is a strategically, financially, and operationally compelling opportunity that brings immediate and long-term value to stakeholders of both companies", said Tom Reeg, CEO of Eldorado. It will also assume Caesars' debt.

To acquire the venerable Caesars name and properties, Eldorado will part with $7.2 billion in cash and around 77 million in stock shares.

Casino and hotel operator Caesars had been pushed to consider a sale by Icahn, its biggest shareholder according to data compiled by Bloomberg. But all of its top leadership will come from Eldorado, from Chairman Gary Carano and CEO Tom Reeg to other top spots.

Caesars, whose properties include the flagship Caesars Palace and the Harrah's chain, is still coping with the fallout of a 2008 leveraged buyout led by Apollo Global Management LLC and TPG that left it with a mountain of debt.

With an agreement finally reached, Caesars Entertainment Corporation abruptly announced on Monday that it will "adjourn, without conducting any business, its 2019 Annual Meeting of Shareholders" - a meeting that had been slated to begin Monday morning in Las Vegas.

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Eldorado operates 26 gambling properties in the USA, extending from Nevada eastward to states such as Colorado, Missouri, Louisiana and New Jersey.

"While I criticized the Caesars Board when I took a major position several months ago, I would now like to do something that I rarely do, which is to praise a board of directors for acting responsibly and decisively in negotiating and approving this transformational transaction", Icahn said in a statement.

Reuters, citing people familiar with the matter, reported on Sunday that Eldorado had clinched a deal with Caesars.

Caesars' shares closed on Friday at $9.99.

Of that amount, Eldorado will pay $8.40 per share in cash; the rest of the payment will be in the form of stock in Eldorado. The S&P Supercomposite Casinos & Gaming Index, which tracks the performance of nine stocks including the two companies, slumped about 20 per cent.

The combined company's ownership would be split roughly between Eldorado and Caesars shareholders, the sources said. It had long-term debt of about $3.06 billion at the end of March.

The new company will be called Caesars and will be based primarily in Reno, Nevada, where Eldorado is based.



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