Eldorado Resorts has agreed to purchase the popular gaming hotel and casino operator Caesars Entertainment in a $17 Billion deal. The multi-billion dollar merger deal is expected to create one of the largest casino brands in the United States. The news of the acquisition comes a few years after Caesar had come out of Chapter 11 Bankruptcy protection, leading to the establishment of Vici Properties.
Caesars Entertainment currently owns over 34 hotel and casinos spread across the United States. One of those casinos is the iconic Caesars Palace located in Las Vegas, which has hosted major events such as sports events and mega concerts.
This included boxing matches featuring the legendary Muhammad Ali and regular concerts featuring Frank Sinatra. The iconic venue, which was established in 1966, was designed to emulate the opulence and luxury of the Roman Empire.
Despite its reputation, Caesars has been going through some turbulent years for the past decade. The company was acquired and has acquired various businesses and had only emerged from bankruptcy in 2017.
Eldorado announced that it has offered Caesar an $8.5 billion cash and shares deal with the intention of fully taking on the casino's huge debt. Eldorado intends to use the merger as a way to become more competitive with its main rivals in the space, which includes major operators such as Wynn Resorts and Las Vegas Sands. Eldorado is one of the fastest growing casino brands in the country, with its share prices seeing a 1,200 percent increase in the past five years.
One of the biggest stakeholders of Caesars, billionaire activist Carl Icahn, reportedly pushed the company to put itself up for sale to minimize its debts. Icahn currently owns a 14.75 percent stake in the Nevada-based casino operator. Icahn also holds three seats on the company's board and a major vote on the firm's next chief executive.
In an interview immediately following news of the merger, Icahn mentioned that he was very much pleased with the outcome of the deal. The investor also stated that the merger should result in five-fold returns, which is good for everyone who has invested in the company.
Eldorado currently operates 26 casinos spread across 12 US states. When it merges with Caesar, the merged company will own a total of 60 casino resorts across 16 states. Eldorado plans to retain the Caesars brand for most of the casinos.
To decrease the merged companies' debts, Eldorado announced that it will be selling some of the properties and estates to Vici Properties. The real estate investment trust was established as a spin-off from Caesar Entertainment and specializes in casino properties.