- Legal States
Mike Johnson November 16, 2019 3 min read
Caesars and Eldorado Shareholders Approve Acqusition
Both Caesars Entertainment Corp. and Eldorado Resorts Inc. shareholders have cleared an anticipated acquisition worth $17.3bn and due to take place in the first three months of 2020.
Caesars, Eldorado Shareholders Clear $17.3bn Acquisition Deal
Caesars Entertainment Corp. and Eldorado Resorts Inc. shareholders voted in support of an anticipated merged whereby Eldorado is paying $17.3 billion to acquire Caesars’ parent company. The vote took place in Reno on Friday, November 15.
Estimated 99% of all shareholders voted in favour of the deal. Executives and shareholders also agreed to relocate the headquarters of the company to Delaware from Nevada, citing better tax conditions.
Eldorado will transact 77 million shares and pay $7.2 billion in cash to claim 51% of Caesars Entertainment Corp. The emerging giant will come with 71,000 slot machines, 3650 table games, 60 casinos and 51,000 hotel rooms, creating a new powerhouse in the hospitality and casino sector.
An Ambitious Timeline
Caesars Entertainment Corp. is in charge of renown brands, such as Harrah’s, Caesars Palace and the World Series of Poker, the most popular poker event in the United States and beyond.
While, shareholders supported the move without any delays, the companies will need to wait for regulatory approvals. According to Eldorado CEO Thomas Reeg, should the anticipated deadlines be met, then Eldorado should be in control of Caesars Entertainment Corp. in Q1, 2020.
‘If I were to place a bet today, I’d be betting on a first-quarter close versus a second-quarter close,’ Reeg said. However, the chief executive cautioned that the companies were following through with regulators and antitrust authorities in real-time to determine whether that timeline was feasible.
Opportunities to Monetize
Reeg has appeared upbeat about the latest acquisition, arguing that the companies would be able to achieve synergies worth $500 million a year. He noted that Eldorado already had areas in mind where Caesars can be monetized.
“[…] we’ve started toward another path of transactions and some unique areas in Caesars that we think will drive material, incremental value to shareholders.”
There will be countless opportunities to drive value for the companies. For instance, Caesars’ global recognition footprint is what Eldorado is clearly after. However, Caesars has done very well at home, forging important alliances, and specifically with the National Football League (NFL).
Not only that, but Eldorado will get an entry into Las Vegas, a market that the company has been avoiding, focusing on smaller areas.
My Big Japan
Caught in the midst of a massive restructuring, Caesars has pulled out of the race for a Japanese Integrated Resort (IR), estimated to cost around $12 billion. While, Asia would certainly suffer from the loss of overseas gaming companies, there have been enough brands to pick up the slack.
Caesars cited its focus on the North American market and restructuring move as its chief priority in the short-term. However, once the 2024/2025 Integrated Resort is built, Japan will move forward with opening bids for a second and a third region, giving the newly-emerged Caesars Eldorado sufficient opportunity to apply and win.
Mike made his mark on the industry at a young age as a consultant to companies that would grow to become regulators. Now he dedicates his weekdays to his new project a the lead editor of GamblingNews.com, aiming to educate the masses on the latest developments in the gambling circuit.
Business November 16, 2019
Business November 16, 2019