Caesars-Eldorado Merger Gets The Nod
What started out as a mere rumour earlier on in March; albeit one of the rocking-the-boat variety; has now come full circle. The latest news on the casino commercial front is that shareholders owning stocks and financial assets in Caesars Entertainment and Eldorado Resorts have given the go-ahead for an official merger to take place between the two entities. The $17.3 billion merger deal, once complete, will establish the 4th largest casino group in the United States.
The newly formed company will retain the Caesars name and will continue to trade as such under the auspices of the current brand and style. The deal is expected to be an asset second to none to both parties, and to this end it stands to perfect reason that Eldorado would not have been the only interested party in acquiring a bit of the Caesars pie. Many other existing casino owners had expressed a public interest in joining into an M&A with Caesars, including Golden Nugget casino owner and billionaire Tilman Fertitta as well as Treasure Island owner Phil Ruffin.
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Eldorado Stands To Benefit Big
What the deal means for the Eldorado group is nearly unfathomable in terms of commercial significance. Eldorado Resorts currently owns 26 casinos in 12 US states, but not a single one in gambling mecca Las Vegas Nevada. Caesars on the other hand, is king of the roost in Nevada State. The group owns the Caesars Palace as well as the Flamingo’s brand. Nearly two dozen Harrah’s properties located all over the US also feature on the group’s nation-wide business asset register.
The newly formed entity will carry the Caesars brand and name but will be managed and headed up by Eldorado Resorts executives. This had been part of major Caesars investor Carl Icahn’s plan all along. Not many people realise the depth of the twang in which the group discovered itself to be in by the time 2015 rolled around. Caesars had been experiencing financial difficulties for going on a decade by that time, which eventually led to the group filing for bankruptcy some four years ago.
This Was Icahn’s Doing
Carl Icahn eventually stated his major-shareholder ultimatum: merge or sell. Icahn had been the driving force behind the Eldorado negotiations right from the start and he also oversaw the process from start to finish.
The nearly $18 billion merger asking price fixes the current value of shares at roughly $13 per single share. This is considered to be very much “fair deal” considering Caesars’ particular liabilities and debts owned to various creditors.