Caesars-eldorado combo’s path to deal clears final hurdle
The New Jersey Casino Control Commission on Friday approved Eldorado Resorts Inc.’s $17.3 billion acquisition of Caesars Entertainment Corp., the last regulatory approval needed before the deal can close.
The deal will result in the formation of the largest gaming company in the
United States.
The New Jersey commission’s approval, in a 2-0 vote, came after more than 11 hours of testimony and deliberations over three days.
“I found their testimony to be forthright in my view,” Commission Chairman James Plousis said in deliberations leading up to the vote. “The petitioners have been honest about the challenges that lie ahead. They have made commitments to restore the proud history of the properties they would acquire, and they’ve acknowledged the
importance of Atlantic City to their success.”
Commissioner Alisa Cooper said she was moved by Eldorado officials’ statements that they believe in the Atlantic City market.
“Anyone on any company that believes in Atlantic City gets my attention,” she said. “It’s believing, it’s creating, it’s initiating, it’s developing, it’s putting everything together. I truly believe that Eldorado should be given the opportunity to be a part of the Atlantic City gaming industry. I look forward to their success.”
Announced over a year ago, in June, the deal required approval from shareholders, the Federal
Trade Commission and regulatory bodies from the 16 states, including Nevada, in which the merged company will operate in order for it to close.
Company officials haven’t addressed the media about what happens next and when.
Two petitions rejected
During Thursday’s session, commissioners received a petition from Hard Rock Atlantic City and Ocean Casino Resort seeking to intervene with their own testimony on the deal. Late Thursday, commissioners rejected the petitions.
In Thursday’s testimony, commissioners questioned two economists about whether the deal would give the new company a competitive advantage because of the concentration of casinos in Atlantic City.
Eldorado already operated the Tropicana Atlantic City, and with the acquisition, it will add Caesars Atlantic City and Harrah’s Resort at Atlantic City when the deal closes. Caesars already announced in April that it had planned to sell Bally’s Atlantic City to Twin Rivers Holdings LLC of Rhode Island for $25 million.
Among the 40 conditions New Jersey regulators are requiring of Eldorado are $400 million in investments over three years. It also will be required to put $125 million into a trust account if the Bally’s deal fails to close on time. The company must assure no property closures for five years after the deal closes.
What’s next?
The real work begins after the deal closes, said Las Vegas-based Brendan Bussmann.
“Shareholders need to get together one more time to ratify everything,” said Bussmann, director of government affairs for Global Market Advisors LLC. “Now you have to start merging these two organizations into one from a systems standpoint and from an operations standpoint. While it’s been a long journey to get to the point we’re at today, delayed
because of COVID, things can move in a forward direction.”
Eldorado’s way of doing things will be different from Caesars’. While Eldorado has emphasized to regulators across the country that it prefers to give its local managers authority to make decisions based on their own market, Caesars was more centralized, with many big decisions emanating from Las Vegas.
Reno’s Carano family has enjoyed success, and members of the family will continue to fill the major executive roles of the corporation.
The new company will be called Caesars Entertainment, and the public company stock will be traded using the CZR ticker symbol on the Nasdaq exchange. The new Caesars also will keep many of the traditional Caesars brands and use them as needed across the country.
Eldorado also will take hold of the Caesars Rewards loyalty program and integrate existing Eldorado customers into it quickly.
On Friday, Eldorado shares were down $2.77, or 6.8 percent, in trading on the Nasdaq that was more than twice the daily average volume. After hours, the issue perked up 25 cents, 0.7 percent, to end at $38.25 a share.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @Rickvelotta on Twitter.