The closing of Eldorado Resorts’ $17.3 billion acquisition of Caesars Entertainment won’t take place until sometime next month after Indiana gaming regulators said Wednesday it will schedule the matter for the July 10 hearing.
In an email message, the Indiana Gaming Commission said the “proposed Eldorado Resorts and Caesars Entertainment transaction will be considered at this meeting.”
Indiana is one of three states, along with Nevada and New Jersey, which has not signed off on the merger, which will create a regional gaming company with nearly 60 properties in 16 states.
The deal is also awaiting approval of the Federal Trade Commission. Eldorado and Caesars have deals in place to sell casinos in several gaming markets – including Nevada, Louisiana, Mississippi, and Missouri – that would seemingly alleviate any anti-trust issues.
However, SunTrust Robinson Bank gaming analyst Barry Jonas suggested Wednesday that Eldorado might have to sell two of the five Indiana casinos the company will control post-merger.
Four of the five casinos are currently owned by Caesars – Hoosier Park in Anderson, Indiana Grand in Shelbyville, Horseshoe Hammond, and Horseshoe Southern Indiana in Elizabeth. Eldorado owns Tropicana Evansville.
On Monday, Eldorado said it was amending its current operating lease on casinos owned by real estate investment trust Gaming and Leisure Properties, which includes Tropicana Evansville. The changes make it easier for Eldorado to sell the operations of several properties, including the Indiana casino.
“We had not previously expected additional market concentration-related divestitures in Indiana, though we believe timing restrictions are less impactful here,” Jonas told investors. He added that a deal could come after the Caesars buyout closes, which could present an “opportunity to find the right buyer.”
Eldorado executives have long said they hoped to complete the transaction by the end of June, but the disruptions from the shutdown of the casino industry nationwide in mid-March in an effort to slow the coronavirus pandemic slowed the transaction’s progress.
The deal was announced on June 24, 2019. Eldorado is the acquiring company; its management will control the merged operation out of its corporate offices in Reno. Current Eldorado CEO Tom Reeg will be CEO of the combined company.
Analysts have said financing for the deal was in place despite closures. Since last month, both Eldorado and Caesars have begun reopening casinos in various states. Eldorado will have 21 of its 23 gaming properties open by end of this week.
Eldorado cleared up major roadblocks in the deal by agreeing in April to sell Eldorado Shreveport in Louisiana and the operations of MontBleu Resort Casino in Lake Tahoe, Nevada to Twin River Worldwide Holdings for a combined $155 million. Eldorado also has another deal in place to sell Isle of Capri Kansas City in Missouri and Lady Luck Vicksburg in Mississippi for $230 million to Twin River, which also clears up antitrust matters.
Twin River is also buying Bally’s Atlantic City from Caesars and real estate investment trust VICI Properties for $25 million. Post-merger, Eldorado will control three Atlantic City properties: Tropicana, Caesars, and Harrah’s.
Also Wednesday, Eldorado announced a debt raise of $3.08 billion to help finance the Caesars transaction. The company is selling debt of $1.875 billion due in 2027 and $1.05 billion due in 2025.
In addition to the GLPI deal, Eldorado announced several financial transactions Monday that are intended to strengthen its balance sheet as it moves toward closing the Caesars deal.
The company will enter into a $400 million, five-year mortgage with VICI Properties for the 500,000 square-foot Caesars Forum on the Strip and is selling 23 acres of undeveloped Strip land to VICI for $103.5 million.
Eldorado also announced plans to sell 18 million shares of stock at $39 per share with the net proceeds to be used for general corporate purposes. Eldorado said in a statement it hopes to raise $672 million from the stock sale.
Shares of Eldorado closed at $43,13 on the Nasdaq Wednesday, up $2.34 or 5.74%.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
