Caesars & Eldorado Close to Finalising Deal

finalising deal
According to recent reports, we could see a merger between Caesars Entertainment Corp and Eldorado Resorts very soon. The new deal is set to be announced publicly once all the details have been ironed out. Last week Eldorado made an offer to Caesars that was rejected by its largest stakeholder, Carl Icahn, as well as by the owner of the Caesars Palace brand, who deemed the offer “underwhelming”.

The bid at the time was said to be a cash-and-stock offer of around $10.50 per share. When the company closed last week at $9.13 a share, it counted for a total market capitalisation of over $5.7 billion. Since the rejected offer, the two companies are believed to be close to agreeing on a new deal, one that is more in line with what Caesars was expecting. 

Caesars Eager to Combine

Rumours of a major industry merger began last year September, when the owner of the Golden Nugget casino chain put a bid forward to Caesars to combine his casino with the global hospitality business. While the offer had been declined, Carl Icahn had mentioned that he was pushing for the company to sell or merge with a similar entity. He said that a combination or merger would most likely be the best path forward for the Las Vegas Casino giant.

In March 2019, the company began talks with Eldorado Resorts about a possible merger. The company duly provided Eldorado access to their financial data for their own analysis for the potential deal. At the same time, it was reported that major businessman Tilman Fertitta was preparing his own offer for Caesars. Since his initial interest though, Fertitta has not made any further offers.

Fertitta was not the only one to approach Caesars about a possible deal. Phil Ruffin who owns Treasure Island in Las Vegas said that he was very interested in a selection of Caesars properties on Strip. He reportedly said he was willing to pay a billion dollars in cash and raise funds for what he said was “great locations” on the Las Vegas Strip.

Eldorado Take The Reigns

In the case of a finalised deal between Eldorado and Caesars, Eldorado’s executives will manage the combined business. Tom Reeg would be the man at the helm. He stepped in as Eldorado CEO in 2018 and successfully completed a major acquisition of Tropicana Entertainment. This significantly boosted the company financial performance, and bodes well for all future acquisitions.