Regional U.S. casino firm Eldorado Resorts Inc has completed its US$17.3-billion acquisition of Caesars Entertainment Corp, according to a Monday press release. The transaction creates the largest casino group in the United States, with the new company - which will use the Caesars name – operating 55 properties, including eight on the Las Vegas Strip, in Nevada.
The merger, first announced in June of last year, included US$8.58 billion in cash and stock, and about US$8.8 billion worth of Caesars’ original debt.
The deal had to be approved by regulators in several states in the U.S. where the new company’s market share exceeded the wishes of the authorities. The acquisition cleared its final hurdle on Friday after receiving the green light from New Jersey gaming regulators.
The merger had also to navigate a series of hurdles, including the Covid-19 pandemic, which shuttered casinos in the U.S. for nearly three months this year.
Eldorado had to sell some of the company’s properties to have the merger approved by regulators. It also raised as much as US$772 million in a new stock offering, negotiated new loan terms with banks, and sold US$6.2 billion in junk bonds to get the deal done.
The new company will carry about US$14 billion in total debt, according to financial records.
As part of the deal, Caesars announced in August that it was dropping plans to bid for one of the first casino licences in Japan. The group was also said to be “evaluating” its commitment to a proposed casino scheme in South Korea.
Caesars struggled with its finances in recent years. The group’s biggest division exited bankruptcy in October 2017, following a US$30 billion leveraged buyout in 2008 that left the company saddled with debt. Activist investor Carl Icahn acquired a stake of nearly 10 percent in Caesars last year and pushed for the the sale to Eldorado.
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”Our own consensus is that any newcomers to this [junket] sector should be corporatised, and should be financially sound and able to commit a higher guarantee deposit”
Kwok Chi Chung
President of junket trade body, the Macau Association of Gaming and Entertainment Promoters