Eldorado Resorts has agreed a $17.3 billion (£13.6 billion) deal to acquire gaming giant Caesars Entertainment.
The deal will create one of the largest gambling ventures in the United States, with around 60 casino resorts and gaming facilities spread across the country.
Caesars owns 34 casinos – including the Las Vegas-based Caesars Palace, which has hosted major sports and music events – but has struggled in recent years.
The company emerged from bankruptcy in 2017.
Eldorado will buy Caesars for about $8.5 billion in cash and shares, with the rest of the transaction made up of Caesars’ debt.
Tom Reeg, chief executive of Eldorado, commented: “Eldorado’s combination with Caesars will create the largest owner and operator of United States gaming assets and is a strategically, financially and operationally compelling opportunity that brings immediate and long-term value to stakeholders of both companies.
“Together, we will have an extremely powerful suite of iconic gaming and entertainment brands, as well as valuable strategic alliances with industry leaders in sports betting and online gaming.
“The combined entity will serve customers in essentially every major United States gaming market and will marry best-of-breed practices from both entities to ensure high levels of customer satisfaction and significant shareholder returns.”
Eldorado hopes the deal will give it the scale to compete with major players such as Las Vegas Sands and Wynn Resorts.
The company will acquire all of the outstanding shares of Caesars for a total value of $12.75 per share, consisting of $8.40 per share in cash consideration and 0.0899 shares of Eldorado common stock for each Caesars share of common stock.
The new company will continue to trade on the Nasdaq Global Select Market.
Jim Hunt, chairman of Caesars, added: “This announcement is the culmination of a thorough evaluation by the Caesars board of directors.
“The board unanimously concluded that the combination of these two companies creating an even stronger entity is a decision for our shareholders’ consideration and vote for immediate and ongoing value.”
In a parallel deal, the combined company will sell some of its property estate to Vici Properties to help pay down debt.
Vici will acquire the real estate associated with Harrah’s Resort Atlantic City, Harrah’s Laughlin Hotel & Casino and Harrah’s New Orleans Hotel & Casino for approximately $1.8 billion.
The properties will be added to an existing master lease and will have an initial annual rent of approximately $154 million.
Ed Pitoniak, chief executive of Vici, said: “Vici is honoured and excited to be integrally involved with Eldorado in this transformative transaction.
“As a REIT, we seek to partner with operators who have the most powerful, valuable and enduring relationships with the end users of our real estate.
“Under Tom Reeg’s leadership and front-line focus, the combination of Eldorado and Caesars will yield the most compelling guest experiences and network effect in American gaming.”
Source: Read Full Article