The New Jersey Casino Control Commission has granted a final approval to the Eldorado-Caesars merger/buyout deal estimated at $17.3bn.
New Jersey Gives Approval to Eldorado-Caesars Merger
A final approval from New Jersey has come on Friday, July 17, allowing Eldorado Resorts Inc, a Nevada-based gaming giant, to finalize the acquisition of Caesars Entertainment Corp. in what is a $17.3 billion buyout deal.
The decision comes after the New Jersey Casino Control Commission cleared the deal and allowed the company to effectively acquire all four casino resorts owned by Caesars in Atlantic City, ruling that the move wouldn’t disrupt the market disproportionately in favor of the emerging giant, which will operate under the Caesars brand.
Commissioner Alisa Cooper and Chairman James Plousis weren’t very sure about the outcome of the deal before the vote, but it all turned out alright. Yet, before entering the session Cooper did say in passing that the “stakes couldn’t be any higher.”
Plousis was happy to listen to the Eldorado’s arguments, with the gambling giant arguing repeatedly in the past that the successful future of Atlantic City was one of the top priorities of the emerging gaming giant.
With the final stamp of approval coming form New Jersey, the new gaming giant is looking at no fewer than 52 properties spread across 16 U.S. states. The company has acquired and consolidated some important landmark properties, including:
- Caesars Palace
- Paris Las Vegas
- Planet Hollywood
Eldorado Not to Hurt Competitiveness in Atlantic City
The move has had broad, world-wide consequences, too. Caesars properties around the globe, including Macau, Canada, Egypt and the United Kingdom all had to be vetted as part of the deal. Meanwhile, Carl Icahn, Caesars’ largest shareholder, will remain such, with 10% of the company’s stock, Eldorado CEO Thomas Reeg reported last week.
Eldorado is buying out Caesars stocks at $12.30 per share, paying in both Eldorado shares and cash. Eldorado will be a majority owner in the newly-emerged company with 56% control over the company, although stock trading will proceed under Caesars Entertainment Inc.
The company will also have an exclusively US-oriented approach, hoping to scale its offer and start tackling a huge debt resulting from the acquisition. A clearance from New Jersey was the last pothole on the road to secure this.
Moving forward, Eldorado will have to also quickly shed properties in Kansas City Missouri, South Lake Tahoe, California and lastly Shreveport, Louisiana to satisfy competitive concerns. However, there was one Federal Trade Commission commissioner who said no, citing the huge amount of debt Eldorado will be supporting – $13 billion.
Meanwhile, Eldorado has agreed to sell three casinos in Indiana and the company is now looking at plans to shed one Las Vegas property, too. Meanwhile, Caesars Entertainment and VICI Properties are selling Bally’s Atlantic City for $25 million to Twin River Worldwide Holdings.
Hard Rock Atlantic City and the Ocean Casino Resort tried to get a word with the commission a day before the voting, but the commission flat-out refused, as it was too late in the process.
According to analysts, the Atlantic City’s gambling market will remain competitive and the sale of Bally would help improve competition a little.