Eldorado Resorts to buy Caesars Entertainment for approximately $ 8.5 billion

Eldorado Resorts Inc. agreed to buy Caesars Entertainment Corp for approximately $ 8.5 billion in cash and shares, as it appears to be building a ladder to compete with larger companies like Las Vegas Sands and Wynn Resorts.

The deal comes more than three months after Caesars agreed to grant its billionaire representative Carl Icahn three seats on the board to its representatives and to give their opinion on the selection of their next CEO.

Icahn, which has been pushing for a Caesars sale, had a 14.75% stake in the company as of March 31, according to data from Refinitiv Eikon.

Reuters, citing people familiar with the matter, reported Sunday that Eldorado had closed a deal with Caesars.

Eldorado’s offer of $ 13.01 per share represents a premium of around 30% compared to Cesar’s closing price on Friday.

Caesars shares rose approximately 15% before the campaign’s opening, while Eldorado fell 5%.

Caesars, which emerged from bankruptcy in 2017, operates casinos under the Harrah’s and Horseshoe brands.

The company owns and operates 34 properties in 9 US states. The USA And three continents, and its long-term debt were $ 8.79 billion as of March 31.

Eldorado has a market value of around $ 4 billion. He had long-term debt of about $ 3.06 billion at the end of March. The company owns and operates 26 properties in 12 US states. USA UU

Eldorado and Caesars shareholders will hold approximately 51% and 49% of the combined company’s outstanding shares after the deal closes in the first half of 2020.

The combined company will retain the Caesars’ name and own, operate, and manage 60 casino-resorts in 16 states. The company’s board of directors will be made up of 11 members, six of whom will come from Eldorado and five from Caesars.

Icahn said he was “satisfied” with the announcement of the deal.

“It is rare that I see a merger in which, due to the great synergies ‘one plus one equals five’, I hope that our investment will prosper,” he said in a statement.

The deal price represents a 51% premium over Caesar’s trading price the day before Icahn representatives joined the Caesars board on March 1.

In a side agreement, the combined company will sell part of its real estate to VICI Properties Inc., while generating $ 3.2 billion in revenue to help pay off the debt.

J.P. Morgan, Credit Suisse, and Macquarie Capital were financial advisers to Eldorado, while Milbank LLP and Latham & Watkins LLP acted as legal advisers.

PJT Partners advised Caesars on the deal, while Skadden, Arps, Slate, Meagher & Flom LLP were its legal advisers.


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