Eldorado Merges With Caesars Entertainment In Deal Worth $17.3 BillionThe Deal Creates Largest Gaming Company In U.S., Gives Eldorado Controlling Stake |
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Caesars Entertainment and Eldorado Resorts announced a merger Monday that will create the largest gambling company in the country.
Eldorado is giving Caesars a valuation of $17.3 billion. Eldorado is giving up $7.2 billion in cash and 77 million stock shares. It will take on all of Caesars’ outstanding debt and own 51 percent of the new, combined company, according to a report from NPR.
Despite closing Friday with a stock price of just under $10, Eldorado will value Caesars’ stock at $12.75. The $7.2 billion in cash that Eldorado is going to fork over is enough for $8.40 of the value. The rest is being paid through Eldorado stock.
The new company will still operate under the Caesars brand, but Eldorado leadership will be taking over, including CEO Thomas Reeg.
“Eldorado’s combination with Caesars will create the largest owner and operator of U.S. 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. “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 deal isn’t official yet, however. The merger needs to be approved by both shareholders of the two companies, as well as gaming regulators. It’s likely to be official in early 2020.
The new company will have a total of 60 properties spread out over 16 states.
The merger is the result of billionaire Carl Icahn’s involvement in Caesars’ operation. In February, Icahn announced that he owned 10 percent of the company and immediately began advocating for a sale.
In response to Icahn and his wishes, Caesars agreed to place three new Icahn-approved members on the board, and installed Anthony Rodio as CEO a few months later.
This is the second time Rodio has been at the helm throughout an Icahn-led sale. Rodio was CEO of Tropicana Entertainment when Icahn sold that company, also to Eldorado, for $1.85 billion.
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