Eldorado to buy Caesars for $17.2bn
Deal could benefit William Hill through access to sports betting licences in more states and reduced competition
Eldorado Resorts has agreed to buy Caesars Entertainment for a total consideration of $17.2bn, the two companies have announced
The deal values Caesars at approximately $12.75 a share, equivalent to a 30% premium on its market price as of Friday.
Eldorado will pay for the deal in cash and shares and take on around $9bn in Caesars debt.
The combined company’s ownership would be split with 51% to Eldorado shareholders and 49% to Caesars’.
Upon completion of the transaction the combined company will retain the Caesars name in order to “capitalize on the value of the iconic global brand”.
The new company will continue to trade on the Nasdaq Global Select Market.
Tom Reeg, CEO of Eldorado, said: “Eldorado’s combination with Caesars will create the largest owner and operator of US gaming assets and is a strategically, financially and operationally compelling opportunity that brings immediate and long-term value to stakeholders of both companies.
“Together, we will have an extremely powerful suite of iconic gaming and entertainment brands, as well as valuable strategic alliances with industry leaders in sports betting and online gaming. The combined entity will serve customers in essentially every major US gaming market and will marry best-of-breed practices from both entities to ensure high levels of customer satisfaction and significant shareholder returns.”
Eldorado guided to $500m of synergies.
Tony Rodio, CEO of Caesars, added: “By joining forces, we believe the new Caesars will be well-positioned to compete in our dynamic industry.”
The deal comes after pressure on Caesars from Carl Icahn, who was appointed to the casino operator’s board earlier this year and known to be lobbying for a sale. Icahn holds an 18.5% stake in Caesars.
The deal could also benefit William Hill, which would gain access to four new states via Caesars properties as Eldorado’s primary access partner.
Hills is also Eldorado’s exclusive supplier of digital and land-based sports betting services as well as online gaming, and could benefit from less competition from Caesars as well.
Eldorado is by far the smaller of the two firms, with a market cap around $4bn.
Caesars has 53 properties in 14 states, while Eldorado as 26 properties in 12 states.
Between them, the firms have market access to key sports betting states including Illinois, New York and Pennsylvania.