July 11th, 2019, Twin River Worldwide Holdings, a casino operator company, announced that it would be acquiring the Lady Luck Vicksburg, Mississippi, and the Isle of Capri Kansas City, Missouri. The two casinos are part of Eldorado property and the acquisition is projected to be an all-cash transaction of $230 Million. The acquisition would see Twin River taking over the operations and real estate assets of the said casinos.
Twin River acquisitions
This is not the first time that the Rhode Island-based company is on an acquisition spree. Earlier this year, the company has seen an agreement reached to purchase the Golden Gates, Mardis Gras from Affinity Gaming, Golden Clutch and three Black Hawk, Colorado casinos.
The year has also seen a reverse takeover of Delaware-based racino. Twin River Worldwide Holdings also owns Hard Rock Casino in Biloxi, Mississippi which they bought in 2014. Twin River Lincoln and Twin River Tiverton have also been part of their state-based casinos.
Lady Luck has had its presence in the market for some time and in March 2018, Churchill Downs Inc. penned down a deal with Eldorado that would see them owning the casino alongside Presque Isle Downs & Casino in Erie, Pennsylvania.
However, the deal with Lady Luck fell through with the reasons pointing to FTC issues who complicated the deal through antitrust issues.
Churchill Downs Inc., on the other side, owned the Riverwalk Casino & Hotel in Vicksburg, which was in close proximity with the Lady Luck and the company still owned Greenville-based Harlow’s Casino Resort.
Eldorado cutting the fat
Roll on the period, Eldorado Resorts has now raised the same antitrust issues ahead of the $18 billion merger with Caesar Entertainment. Eldorado is looking to trim some fat and this is one of the moves in readiness of the deal.
The merger will likely create several markets and the new partnership will prove to be too dominant for the FTC’s tastes.
Both the companies have had some of their properties in Mississippi and there is an expectation of more sell-offs in Atlantic City where the merged company is set to own four out of the nine casinos based in the City.
The process of cutting down some of the fat has also been felt in Missouri, which has become one of the concerns by Eldorado. June 17th, saw the company announce the sale of two Missouri-based casinos, one based in West Virginia was also sold to Century Casinos and the company also sold VICI Properties Inc., which is a spin-off real estate investment, with its origin from Caesar Entertainment chapter 11 reorganization.
The deals have been seen as an avenue to help Eldorado clear out some of the debts and through this, there will be an attraction of financial backing for the deals carried out.
‘Serious and capable to invest capital’
On Twin River’s part, they believe the acquisitions will show investors the company’s seriousness and capability of investing their capital to growth acquisitions. In a statement released, the company cited the main reason it acquired the Isle of Capri Kansas City property was due to its location in downtown that has been reserved for development plans by the local officials.
‘We believe there is an opportunity for capital investment in the property which we believe will have a transformative impact and integrate well with local development efforts in the area.’
The company said.