Eldorado Resorts takes on bigger rivals with $8.5 billion Caesars buy

(Reuters) - U.S. casino operator Eldorado Resorts Inc has agreed to buy rival Caesars Entertainment Corp for about $8.5 billion in cash and stock, as it looks to build scale to take on larger companies such as Las Vegas Sands and Wynn Resorts

Reuters June 25, 2019 01:05:47 IST
Eldorado Resorts takes on bigger rivals with $8.5 billion Caesars buy

Eldorado Resorts takes on bigger rivals with 85 billion Caesars buy

(Reuters) - U.S. casino operator Eldorado Resorts Inc has agreed to buy rival Caesars Entertainment Corp for about $8.5 billion in cash and stock, as it looks to build scale to take on larger companies such as Las Vegas Sands and Wynn Resorts.

The deal comes more than three months after Caesars agreed to give billionaire investor Carl Icahn three board seats to his representatives and a say on the selection of its next chief executive officer.

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

Shares of Caesars, up 47% this year, rose 11.4% to $14.51 at mid-afternoon, while Eldorado's stock, which has increased 41.4% year to date, fell 13.2% to $44.45.

Eldorado has made a series of acquisitions over the past few years including a $1.85 billion deal for Icahn-backed Tropicana Entertainment in 2018 and a $1.7 billion deal for Isle of Capri Casinos in 2017, strengthening its free cash flow and earnings per share.

The company's stock has risen more than 10 times since it went public in 2014, outperforming MGM Resorts, Las Vegas Sands and Wynn Resorts, whose shares have been under pressure due to their exposure to Macau and trade tensions with China.

"Eldorado has proven its ability to execute. ... We expect the long-term positives (of the deal) could prove out," Jefferies analyst David Katz said.

Eldorado's offer of $13.01 per share represents a premium of about 30% to Caesar's closing price on Friday.

Caesars, which emerged from bankruptcy in 2017, operates casinos with the Harrah's and Horseshoe brands. The company owns and operates 34 properties in 9 U.S. states and three continents, and its long-term debt stood at $8.79 billion as of March 31.

Founded in 1973 by the Carano family, Eldorado had long-term debt of about $3.06 billion at the end of March. The company owns and operates 26 properties in 12 U.S. states.

Icahn said he was "pleased" by the deal announcement.

"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," he said in a statement http://bit.ly/2KBX10z.

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

Eldorado and Caesars shareholders will hold about 51% and 49% of the combined company's shares following the close of the deal in the first half of 2020. The company is targeting $500 million in savings in the first year of its operation.

In a parallel deal, the combined company will sell some of its real estate to VICI Properties Inc, while generating $3.2 billion of proceeds.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Maju Samuel)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Gilead nears deal to buy Immunomedics for more than $20 billion, WSJ reports
Business

Gilead nears deal to buy Immunomedics for more than $20 billion, WSJ reports

(Reuters) - Gilead Sciences Inc is nearing a deal to buy biopharmaceutical company Immunomedics Inc for more than $20 billion, the Wall Street Journal reported on Saturday, citing people familiar with the matter. A deal for Immunomedics, which last month reported positive data from a late-stage study for its breast-cancer drug, could be announced Monday if not sooner, the Journal said https://www.wsj.com/articles/gilead-nears-deal-to-buy-immunomedics-for-more-than-20-billion-11599936777?mod=hp_lead_pos2. Gilead and Immunomedics did not respond immediately to emailed requests from Reuters for comment

China bans German pork imports after African swine fever case
Business

China bans German pork imports after African swine fever case

SHANGHAI (Reuters) - China banned pork imports from Germany on Saturday after it confirmed its first case of African swine fever last week, in a move set to hit German producers and push up global prices as China's meat supplies tighten. China's ban on imports from its third largest supplier comes as the world's top meat buyer deals with an unprecedented pork shortage after its own epidemic of the deadly hog disease. The ban on Germany, which has supplied about 14% of China's pork imports so far this year, will push up demand for meat from other major suppliers like the United States and Spain, boosting global prices.

Libya's Haftar committed to ending oil blockade, U.S. says
Business

Libya's Haftar committed to ending oil blockade, U.S. says

CAIRO (Reuters) - Libyan commander Khalifa Haftar has committed to ending a months-long blockade of oil facilities, the U.S.