Eldorado Resorts Buys Caesars for $17.3 Billion

Eldorado Resorts announced Monday it will buy Caesars in a deal valued at $17.3 billion, increasing its portfolio to 79 casinos, thereby making it one of the largest gambling and entertainment ventures in the United States.

The cash-and-stock deal, which includes assumption of debt, will enable Eldorado to significantly strengthen its presence in Las Vegas, where Caesars is based. In fact, the enlarged company will be called Caesars, but be based in Reno, Nevada, where Eldorado is currently located. It will be led by Eldorado CEO Tom Reeg and Eldorado Chairman Gary Carano.

“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 games,” Reeg said in a prepared statement.

“This announcement is the culmination of a thorough evaluation by the Caesars board of directors,” said Jim Hunt, chairman of Caesars. “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.”

Liberalized regulations in the U.S. sports betting market were key to the deal. Together, Eldorado and Caesars properties create a land-based casino powerhouse with ambitions to expand its presence across several jurisdictions and to elevate its status in the sports betting market.

Reeg said that the deal will also facilitate strengthening of the Caesars Rewards program.

“Relative to our prior acquisitions, the combination with Caesars presents attractive incremental revenue synergy opportunities as we plan to strengthen Caesars Rewards, the industry’s leading player loyalty and CMS database, and combine it with Eldorado’s to market to over 65 million rewards customers nationally,” he said.

Eldorado will pay $12.75 for each Caesars share—$8.40 per share in cash and 0.0899 share of Eldorado stock. Caesars is blued at about $8.6 billion in the transaction, and El Dorado will assume some $8.8 billion of its debt. If approved by gaming regulators and shareholders, the deal is scheduled to close in the first half of next year.

The transaction stipulates that shareholders of Eldorado Resorts Inc. will hold about 51 percent of the company’s outstanding stock, with Caesars Entertainment Corp. shareholders holding the remaining and 49 percent.

Eldorado has a market value of around $4 billion. The company operates 26 properties in 12 states. Caesars has properties in 14 U.S. states—including the Harrah’s and Horseshoe casino brands—and five other countries.

Caesars emerged from bankruptcy protection in late 2017, but still faced significant long-term debt and cost pressures that it attempted to address by cutting bulky corporate overhead. Along with other casinos, however, Caesars has financially benefitted from the broader legalization of sports betting. Billionaire Carl Icahn has the largest stake in Caesars and pushed for fundamental changes at the company earlier this year. News about the merger arrived a few months after it first emerged that the two companies had engaged in consolidation discussions.

Eldorado also announced Monday that VICI Properties Inc. will acquire the real estate associated with Harrah’s Laughlin Hotel & Casino in Nevada, Harrah’s Resort Atlantic City in New Jersey and Harrah’s New Orleans Hotel & Casino for approximately $1.8 billion.

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