Eldorado Resorts has officially sealed the deal with Caesars Entertainment. What started off as a rumor about Caesars due to their imminent comeback last year has now been officially confirmed. Now, the US gambling industry’s eyes are practically peeled at the prospect of what will come of the greatest “merger giant” their market has ever seen.
- Eldorado Resorts buys Caesars Entertainment in a cash-and-stock deal valued at $17.3 billion
- After a lengthy bankruptcy and recuperation, this buy-out rescues Caesars out of a great deal of mess.
- The merger is set to create one of the largest gambling companies in existence.
Where Eldorado Meets Caesars
There had been prior rumors about the sale of the Caesars establishment, along with the remaining brands under the same ownership and management. Preparations became most evident a few months back as Carl Icahn became a large enough shareholder at Caesars in order to prompt and guide the company towards the sale.
Speculations regarding buyers came from several directions, but it was the Reno-oriented Eldorado Resorts that made it to the final cut. The company purchased Caesars along with all of its accompanying brands – Harrah’s, Caesars Palace, Bally’s – all the while also buying out the company’s permanent debt.
Eldorado Resorts buys Caesars for $17.3 billion
The sale went on under seemingly fair circumstances, with Caesar’s final price per share being $12.75. The purchase is agreed to take place as a cash-and-stake takeover. This led to the following payout – Eldorado paid about $7.3 billion in cash, at a price of $8.40 per share, as well as about $77 million in stocks at a rate of 0.0899 Eldorado share for one Caesars share.
Eldorado on the Quest for Gold
Enthusiasm is booming among the management team at both venues, with the Resorts CEO Tom Reeg ultimately coming forward with a statement:
Together, we 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.
Bear in mind that prior to this purchase, the Eldorado Resort has additionally acquired Tropicana Entertainment and the Isle of Capri casino chains. As it seems, they are definitely going for big, and it is working to their advantage.
The New Casino Giant
Eldorado Resorts are poised to create a casino giant and the Caesars purchase came in at just the right time and amount. After all, the entire Caesars group makes up 53 properties across 14 states in the US, as well as some in foreign countries. On the other hand, Eldorado has 26 properties in 12 states. Hence, it is no surprise that they are expecting this merger to boost their presence most notably.
Finding Common Ground
It’s been mentioned that the newly created “giant” will hold the Caesars brand, but focus their headquarters in Eldorado-land, Reno. Yet, some balance has been achieved, as the Eldorado Chairman sets to take over the newly created company. He stated that they will still have a “significant corporate presence” in Las Vegas casinos.
When it comes to splitting the parts, 51% of shares of the new casino company will fall in the hands of existing Eldorado holders, while the remaining 49% at Caesars’. This is still a fair and satisfactory offer, prompting even the lead promoter of the Caesars sale, its shareholder Carl Icahn to state the following:
It is rare that you see a merger where because of the great synergies “one plus one equals five”. I look forward to seeing our investment prosper.
What’s In Stock for the Future?
The stocks have already shown primary fluctuations, although this is expected to stabilize significantly over the years. The Eldorado stocks fell by 11%, down to $45.39, but Caesars soared by 15%, up to $11.55.
The Online Gambling Factor
More time needs to pass in order to get a clearer understanding of what’s in store for the future of this casino giant. An important consideration in this regard is the online counterpart of each of the two parties. The online gambling industry is making its way through US legislation, and these two platforms cover a large portion of this yet untapped market. It’s safe to say that things are only looking for the better for the new Caesars under Eldorado management.