Caesars and Eldorado Are on the Verge of a Merger
According to available information, a cash-and-stock deal could be made public this week if everything goes as planned.
Looking for the Right Offer
It was revealed last week that Caesars had rejected a previous offer made by Eldorado, describing it as “underwhelming”. However, the two sides have been negotiating a new bid ever since, and the unnamed sources say the deal is close to being revealed in the following days.
The first rumours of Caesars’ potential merger began floating around last year. They soon proved to be right, as Texas businessman Tilman Fertitta, the owner of Golden Nugget, made a bid that would have merged two casino and hospitality businesses. But Caesars rejected the offer.
Caesars Push for Merger
Caesars’ largest shareholder, Carl Icahn, has been pushing for such a move since the beginning of the year. Icahn currently has a 28.5% stake in the casino operator and has said on several occasions that a merger would be the best option for the company.
There were rumours Caesars entered merger talks with Eldorado Resorts in March, which emerged about the same time that Fertitta was getting ready to make a new offer for Caesars. But the second bid is yet to be made.
Last month, Phil Ruffin emerged as another potential buyer of Caesars properties on the famous Strip. Ruffin, the owner of Treasure Island, confirmed he was interested in Caesars, and added he would pay $1 billion in cash for the hotel and casino resort. He also stated the Las Vegas hotel and casino giant had some great locations on the Strip.
Eldorado Would Have the Control
If the deal between Caesars and Eldorado goes through, the latter will take control over the combined business. At this moment, Eldorado is led by Tom Reeg, who was appointed CEO last year. He successfully completed the acquisition of Tropicana Entertainment back in fall last year. This move proved to be beneficial for Eldorado, significantly improving its performance.
Sources indicate that Mr. Reeg is highly respected by Mr. Icahn, which could mean the investor could give the green light for his arrival at the helm of a combined Caesars/Eldorado business.
It was revealed last week that William Hill and Caesars were in talks over a merger last year. According to The Times, the deal fell through, as the two sides couldn’t agree on a price.
If Caesars and Eldorado reach a deal, the casino operator and the British bookmaker would work together. Sort of. In September of last year, William Hill’s US division and Eldorado inked a 25-year deal that made the former the exclusive provider of both retail and digital betting services plus online gambling services for the Hills.
Under the provisions of this agreement, Eldorado obtained a 20% stake in William Hill US, while the latter expanded its footprint to Eldorado’s customer base of more than 23 million people.