- Nevada casino regulators approve the purchase of Caesars Entertainment Corp. by Eldorado Resorts
- The $17.3 billion deal sees the company own and operate 55 properties across 16 states in the US
- The merger and approval received unanimous support from regulators
- Approvals from New Jersey and Indiana would see Eldorado Resorts become the world’s biggest casino operator
- Questions of employee retention, debt acquired, and diversity in the boardroom raised
Wednesday, July 8, saw Nevada casino regulators give Reno-based Eldorado Resorts Inc. a green light in the purchase of Caesars Entertainment Corp. The $17.3 billion deal will see a gambling giant created that will own and operate 55 properties across 16 states in the US.
The merger received unanimous endorsement and approval from the Nevada Gaming Control Board after pointed questions. June 26 saw the Federal Trade Commission okay the plan after Eldorado agreed to sell California, Kansas City, Louisiana, South Lake Tahoe, and Missouri properties.
Steven Cohen, a Gaming Commissioner threw his support for the deal before casting his vote saying that to have the deal done during these tough economic times caused by the pandemic was good for them, the state, and the US in general.
Approvals from New Jersey and Indiana regulators in the coming days would create the world’s largest casino operator and become one of the largest employers in Nevada beating MGM Resorts International. The company, however, will not drop the name Caesars Entertainment and will continue stock trades and operations under it.
Focus on domestic gaming
Thomas Reeg, Eldorado chief executive, speaking before testimony by various Eldorado executives said that the main focus will be on domestic gaming. Bally’s, Horseshoe, and Harrah’s are other Caesars brands with Linq, Flamingo, Paria Las Vegas, and Planet Hollywood standing as the Las Vegas Strip properties.
‘We think what we’re good at is taking existing properties, optimizing their operations, building a responsible capital structure, and driving value for all of our stakeholders.’ He said.
Reeg together with other company officials including former Las Vegas mayor, Jan Jones Blackhurst, who will join the board termed the entity a ‘New Caesars’. Tony Rodio, Caesars Entertainment chief executive is expected to stay as an adviser according to Carano.
Las Vegas-based Caesars will trade their stock to Eldorado at $12.30 per share. Eldorado will use $8.70 in cash with the remainder in Eldorado shares. The merged entity will see Eldorado own 56% of it.
Wednesday saw Caesars Entertainment shares close at $12.12, up to 20 cents. For Eldorado Resorts, a $1.72 was recorded with the stock ending at $39.75.
Caesars in late 2017 emerged from bankruptcy protection and would later in 2018 turn down an Eldorado offer. A boost for the merger came from billionaire financier Carl Icahn who purchased a big block of Caesars Entertainment shares. He later pushed for company changes and proceeded to back the hiring of Rodio from Icahn’s Tropicana purchased by Eldorado Resorts in 2018.
Questions about employee retention, the deal’s acquired debt amount, and diversity in the merged boardroom were raised by the Gaming Control Board members. Reeg stated that it would be a ‘nightmare’ in the legal and financial spheres should the merger fail.
$1 billion was lost by the companies after the closure of businesses during the coronavirus pandemic according to Eldorado’s chief financial officer, Bret Yunker. However, he is confident that the merged entity has enough cash to ‘get to the other side of the crisis’ after negotiating several financial-related agreements in the past weeks.
Close to 34,000 employees were working with the two companies in Nevada before the shutdown. Reeg says that with the reopening, some jobs such as buffets might not return and some corporate positions close to 1,000 might be eliminated.