Eldorado is buying Caesars to form America’s largest casino business

Posted at 5:34 AM, Jun 24, 2019
and last updated 2019-06-24 09:52:27-04

Eldorado Resorts is buying Caesars Entertainment to create the largest gaming company in the United States.

Eldorado Resorts said Monday it has agreed to buy its larger rival in a cash and stock deal worth $17.3 billion, which includes Caesar’s mountain of debt. The announcement comes three months after billionaire investor Carl Icahn joined Caesars’ board and pushed for a sale of the company.

Caesars is already one of the largest casino businesses in the world. It owns some of Las Vegas’ most recognizable properties including Caesars Palace and the Flamingo. It also owns the Harrah’s brand, which has nearly two dozen resorts and casinos in the United States.

But it has been in and out of financial trouble over the past decade. Part of the company filed for bankruptcy in 2015, and it holds nearly $9 billion in debt — more than the company’s roughly $7 billion market value.

Eldorado will buy Caesars for $12.75 a share, which is almost 30% above its Friday close of $9.99 per share. Caesars’ stock jumped 16% in premarket trading, while Eldorado’s stock slumped nearly 7%.

The proposed company would have a large footprint across the United States, with approximately 60 casinos and resorts spanning 16 states. If the deal is completed, the new company could help better position itself against its largest rivals, including MGM Resorts and Wynn Resorts.

Eldorado doesn’t own any properties in Las Vegas, but it has 26 casinos in 12 states, including the Tropicana in Atlantic City and its flagship location in Reno, Nevada.

Once the transaction closes, the new company will keep the Caesars name to “capitalize on the value of the iconic global brand.” It will trade on the Nasdaq.