In another step in Eldorado Resorts’ planned acquisition of Caesars Entertainment, the Indiana Gaming Commission said it will consider the matter at its July 10 hearing.
First announced on June 24, 2019, the$17.3 billion transaction won’t close until sometime after that. Along with Indiana, Nevada and New Jersey have not yet signed off on the merger, which will result in a regional gaming company with about 60 properties in 16 states. The Federal Trade Commission (FTC) also has to approve the deal.
Eldorado executives said they hoped to complete the transaction by the end of June. Progress was slowed by casino shutdowns in mid-March due to Covid-19, which hammered the casino industry nationwide.
In an effort to alleviate anti-trust issues, Eldorado and Caesars have deals in place to sell casinos in Nevada, Louisiana, Mississippi, Missouri and three other markets. However, Eldorado still may have to sell two of the five Indiana casinos it will own after the merger, according to SunTrust Robinson Bank Gaming Analyst Barry Jonas. Four of the five casinos currently are owned by Caesars: Hoosier Park in Anderson, Indiana Grand in Shelbyville, Horseshoe Hammond and Horseshoe Southern Indiana in Elizabeth. Eldorado owns Tropicana Evansville.
Eldorado also said it is amending its current operating lease on casinos owned by real estate investment trust Gaming and Leisure Properties, which includes Tropicana Evansville. The changes will make it easier to sell the operations of several properties, Eldorado officials said.
Jonas told investors, “We had not previously expected additional market concentration-related divestitures in Indiana, though we believe timing restrictions are less impactful here. A deal could come after the Caesars buyout closes, which may present an opportunity to find the right buyer.”
Eldorado is the acquiring company, with management controlling the merged operation from its Reno headquarters. Current Eldorado CEO Tom Reeg will be chief executive officer of the combined company.
Despite casino closures, analysts said financing for the deal is in place. Both Eldorado and Caesars have begun reopening casinos in various states, and 21 of Eldorado’s 23 gaming properties will have opened on or before June 20.
Also in a move to avoid anti-trust concerns, in April Eldorado agreed to sell Eldorado Shreveport in Louisiana and the operations of MontBleu Resort Casino in Lake Tahoe to Twin River Worldwide Holdings for a combined $155 million. Eldorado also will sell Isle of Capri Kansas City in Missouri and Lady Luck Vicksburg in Mississippi for $230 million to Twin River.
Twin River also will buy Bally’s Atlantic City from Caesars and real estate investment trust VICI Properties for $25 million. Post-merger, Eldorado will control Tropicana, Caesars and Harrah’s in Atlantic City.
To help finance the Caesars deal, Eldorado announced a debt raise of $3.08 billion. The company will sell debt of $1.875 billion due in 2027 and $1.05 billion due in 2025.
Also, Eldorado will enter into a $400 million, five-year mortgage with VICI Properties for the 500,000 square-foot Caesars Forum on the Las Vegas Strip and will sell 23 acres of undeveloped Strip land to VICI for $103.5 million.
Eldorado also will sell 18 million shares of stock at $39 per share with the net proceeds, which it hopes to be $672 million, to be used for general corporate purposes.
