Eldorado Resorts buys Caesars Entertainment in $17.3 billion deal
Eldorado Resorts buys Caesars Entertainment in a deal that creates the largest gambling company in the US.
Caesars Entertainment share price jumped 14% after being bought out by Eldorado Resorts. The merger will be paid for in a $17.3 billion cash-and-stock deal, including taking on Caesars’ debt.
Eldorado/Caesars merger details
Caesars owns and operates 34 properties across nine US states and three continents. Caesars is one of the largest and most renowned casino corporations in the US, but had financial trouble over the past few years. The company filed for bankruptcy in 2015. The corporation’s $9 billion debt is greater than its $7 billion market value.
Eldorado owns 26 casinos in 12 US states. Though the casino is smaller than Caesars, Eldorado has been much more successful over the last few years with acquisitions of rival casino companies like Isle of Capri. Eldorado purchased Caesars to gain strength against competition from Wynn Resorts.
The newly created casino company will still have the Caesars name and manage 60 casinos in 16 states. Eldorado shareholders will own 51% of the company and Caesars stockholders will get 49%.
Eldorado and Caesars comment on merger
Tom Reeg, chief executive officer (CEO), of Eldorado, spoke about Eldorado’s merger with Caesars.
‘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 Reeg.
Jim Hunt, chief executive officer (CEO) of Caesars, spoke about the approval of the deal by Caesars’ board of directors.
‘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,’ said Hunt.
Carl Icahn, a prominent investor in Caesars, pushed for the sale of the company for months. He praised Eldorado’s merger with Caesars.
‘While I criticised 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,’ said Icahn.
The deal still has to be approved by the shareholders of both companies. The merger is expected to be completed in early 2020.
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