The Atlanta Journal-Constitution
Eldorado Resorts to buy Caesars in deal valued at $17 billion
A casino juggernaut was formed Monday when Eldorado Resorts announced it is buying Caesars in a cash-and-stock deal valued at $17.3 billion.
The acquisition will put about 60 casino-resorts in 16 states under a single name, Caesars, creating the largest gambling operator in the United States. The deal — following pressure from activist investor Carl Icahn — is targeted to close in the first half of 2020 if approved by gambling regulators and shareholders.
It would open the doors of the Las Vegas Strip market to Eldorado.
“We are incredibly excited. This is an iconic brand,” Eldorado CEO Tom Reeg said referring to Caesars Entertainment during a conference call. “It’s really a level of property and brand that we have not had the great fortune to control and now we will.”
Eldorado will pay $8.40 per share in cash and 0.0899 shares of Eldorado stock for each Caesars share, or $12.75 per share. The transaction values Caesars at about $8.6 billion, and Eldorado will pick up about $8.8 billion of the casino’s debt.
Shareholders of Eldorado Resorts Inc. will hold about 51% of the company’s outstanding stock, with Caesars Entertainment shareholders holding the remaining and 49%.
The company will be led by Reeg, along with Eldorado Chairman Gary Carano. It will be headquartered in Reno, Nevada, where Eldorado is based, and have a significant corporate presence in Las Vegas, where Caesars is based.
The deal was months in the making. Icahn earlier this year revealed he had amassed an enormous stake in Caesars Entertainment and pushed for fundamental changes at the company, including board representation and a say in the replacement of the thenCEO. He argued that the company’s stock was undervalued and the best way to boost it would be to sell the company.
Caesars Entertainment Corp., which operates more than 30 casinos in the U.S., emerged from bankruptcy protection in late 2017, but it’s been struggling since.
Eldorado said Monday that it also reached an agreement with VICI Properties Inc. in which VICI will acquire the real estate associated with Harrah’s Resort Atlantic City, Harrah’s Laughlin Hotel and Casino located about 100 miles south of Las Vegas, and Harrah’s New Orleans Hotel and Casino for approximately $1.8 billion.
Caesars operates three casinos in Atlantic City and Eldorado operates one. Caesars’ stock jumped 16% Monday, while shares of Eldorado fell 10%.