Eldorado and Caesars’ deal will complete “on time,” executives from both companies assure, and now pending regulatory approval.
Eldorado Merger with Caesars Going as Planned
Two years after Eldorado Resorts and Caesars Entertainment Corp. announced their plan to create a $17.3 billion gaming behemoth, the deal between the two companies seems to move along according to plan notwithstanding any delays forced by the COVID-19 outbreak.
In fact, 2020 may indeed be the year when the merger is completed, company executives said. With just two weeks away from the end of the first half of the year, the anticipated timeline for the realization of the deal as per executives’ plans, the deal still needs four regulatory signatures to continue.
Yet the lack of some regulatory endorsement (yet) doesn’t seem to bother executives who are as sure as ever that the deal will go through without a hitch. Wall Street even recommended a “buy” rating for Eldorado’s deal.
Other financial institutions have chimed in as well, outlining a brave future for Eldorado and Caesars’ merger. Commenting on the deal, Deutsche Bank’s Carlo Santarelli had this to say, cited by the Las-Vegas Review Journal:
We have become more confident that the industry is about to experience a material transformation in an expense structure that has essentially been accepted as is for some time.
Still Waiting on the Big Boys to Sign Off
With Eldorado obtaining multiple regulatory approvals around the world, the company still needs to secure the blessings of New Jersey, Nevada, and the Federal Trade Commission (FTC), and Indiana Gaming Commission, four serious disruptors in the formal approval of the merger.
Eldorado has been moving quickly, divesting ownership of properties in Nevada, Missouri, and Louisiana in a bid to reassure regulators that the company is only interested in a fair competition.
Another financier, Brendan Bussmann of Global Market Advisors LLC, has also agreed that here seems to be little that regulators may want to do to upset the deal. Despite the tight schedule, the merger should now be finalized. Eldorado and Caesars have also shown resilience and determination, even though Eldorado’s stock tumbled to $8.40 from $12.75 in the months leading up to the deadline.
Back on April 1, Eldorado triggered a “tick fee,” which has been amassing $2.3 million a day because of not completing the deal sooner. This has sweetened the deal further for Caesars shareholders who will receive a nice bonus because of the fee. Yet, Eldorado CEO Thomas Reeg said that there was no reason to renegotiate the terms, with the only objective now being to meet the new deadline, which had been pushed from April to the end of June.
It now all hinges on whether the FTC can complete its review quickly enough to allow the Nevada Control Board and Nevada Gaming Commission to schedule an ad-hoc meeting and vote on the move. New Jersey and Indiana Gaming Commission will also have to give a formal go-ahead before the deal can be finally sealed.