The final hurdle holding up a $17.3 billion mega-casino deal was finally cleared late last week. New Jersey gaming regulators gave their approval of Eldorado Resort’s proposed acquisition of Caesars Entertainment.
This was the final state involved in the process. Indiana approved the merger earlier in July with certain stipulations. The new company will have to sell off three casino properties in that state by the end of the year.
When Did Eldorado Resorts Get New Jersey’s Approval For $17.3 Billion Casino Deal?
The New Jersey Casino Control Commission approved the plans on Friday, July 17. The only stipulation was keeping the three Atlantic City casinos involved up and running for the next five years. It did not see the new company as a threat to the competitive balance. There are a total of nine casino properties in that coastal gambling resort.
The Chairman of the New Jersey Casino Control Commission is James Plousis. He stated that Eldorado executives had been “honest about the changes that lie ahead.” He was happy they “acknowledged the importance of Atlantic City to their success.”
Eldorado Buys Caesars at an agreed stock price of $12.30 per share.
The deal should be able to close in a relatively short amount of time. Eldorado will buy out Caesars at an agreed stock price of $12.30 per share. The cash portion is $8.30 with the remainder of the buyout coming in Eldorado stock. The new company will own 56 percent of the company. It will continue to trade as Caesars Entertainment Inc.
Billionaire real estate mogul Carl Icahn will become the single biggest investor. He acquired a large block of Caesars stock in 2017 with the company emerging from filing for bankruptcy. He has been a strong advocate of this planned merger.
Thomas Reeg is the CEO of Eldorado Resorts and he will retain his position in the new company. He has already stated that the new Caesars will focus its attention on its US gambling operations. At the close of business on July 17, Eldorado shares were trading at $39.01. Shares of Caesars closed at $12.39.
The origins of Eldorado Resorts can be traced back to 1973. It all started with a family-owned casino resort in Reno. The new company will control 52 properties in the US market across 16 states.
This includes the following casinos on the Las Vegas Strip:
- Caesars Palace
- Paris Las Vegas
- Planet Hollywood
The company will also have a gaming presence in Canada, the UK an Egypt. It will have an ownership interest in a golf course in Macau as the Asian casino gambling capital.
The merger process involved an approval process that crossed state lines and also involved the Federal Trade Commission. The new company will sell off properties in Kansas City, South Lake Tahoe and Shreveport, Louisiana. It will also sell Bally’s Atlantic City for $25 million. The new owner is Rhode Island-based Twin River Worldwide Holdings.
Part of the plans in the Garden State include a $400 million improvement plan for the other three casinos (Caesars, Harrah’s and Tropicana).