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The
deal comes more than three months after Caesars agreed to give
billionaire investor Carl Icahn three board seats to his
representatives and a say on the selection of its next chief
executive officer.
Icahn, who has been pressing for a sale of Caesars, held a
14.75% stake in the company as of March 31, according to data
from Refinitiv Eikon.
Reuters, citing people familiar with the matter, reported on
Sunday that Eldorado had clinched a deal with Caesars.
Eldorado's offer of $13.01 per share represents a premium of
about 30% to Caesar's closing price on Friday.
Shares of Caesars were up about 15% before the opening bell,
while Eldorado was down about 5%.
Caesars, which emerged from bankruptcy in 2017, operates casinos
with the Harrah's and Horseshoe brands.
The company owns and operates 34 properties in 9 U.S. states and
three continents, and its long-term debt stood at $8.79 billion
as of March 31.
Eldorado has a market value of about $4 billion. It had
long-term debt of about $3.06 billion at the end of March. The
company owns and operates 26 properties in 12 U.S. states.
Eldorado and Caesars shareholders will hold about 51% and 49% of
the combined company's outstanding shares following the close of
the deal in the first half of 2020.
The combined company will retain Caesars' name and own, operate
and manage 60 casino–resorts across 16 states. The company's
board of directors will consist of 11 members, six of whom will
come from Eldorado and five from Caesars.
Icahn said he was "pleased" by the deal announcement.
"It is rare that you see a merger where because of the great
synergies 'one plus one equals five.' I look forward to seeing
our investment prosper," he said in a statement.
The deal price represents a premium of 51% over Caesar's trading
price on the day before Icahn's representatives joined the
Caesars board on March 1.
In a parallel deal, the combined company will sell some of its
real estate to VICI Properties Inc, while generating $3.2
billion of proceeds to help pay down debt.
J.P. Morgan, Credit Suisse and Macquarie Capital served as
financial advisers to Eldorado, while Milbank LLP and Latham &
Watkins LLP acted as its legal counsel.
PJT Partners advised Caesars on the deal, while Skadden, Arps,
Slate, Meagher & Flom LLP served as its legal counsel.
(Reporting by Ankit Ajmera in Bengaluru; Editing by Maju Samuel)
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