An important step towards deal completion
The Nevada Gaming Commission unanimously gave its approval for the merger between Caesars Entertainment Corporation and Eldorado Resorts Inc., following back-to-back hearings by the state’s gaming regulators.
exceeding expectations since reopening
The chief executive officer of Eldorado, Tom Reeg, delivered a presentation to the Nevada Gaming Control Board on July 8, highlighting how the company’s properties have been exceeding expectations since reopening after the COVID-19 shutdown.
Reeg faced three hours of intense questioning from the board, answering numerous questions before getting the green light for the merger deal to go ahead.
Addressing COVID-19 concerns
Addressing concerns about the impact of COVID-19 on operations, Reeg spoke about the recent demand since casinos were allowed to reopen. He added that group bookings beginning September were looking “extremely strong”.
Once the merger goes ahead, the CEO aims to improve results at the various Caesars properties, and to integrate the Eldorado casinos into the existing Caesars loyalty program.
further $500m in annual savings as a result of synergies
Reeg also said there will likely be a further $500m in annual savings as a result of synergies, adding to the previous estimate of $400m. There will also be about 1,000 job cuts after the merger, with most of the layoffs affecting employees at the Las Vegas corporate office.
After listening to the testimony during the Control Board’s hearings, the Gaming Commission had fewer questions and was quick to give the deal its seal of approval.
What’s next for the merger to go through?
The merger agreement got the green light from the Federal Trade Commission last month once certain conditions were met. It now awaits approval from the gaming regulators in New Jersey and Indiana.
The Indiana Gaming Commission is set to meet on Friday, the Indiana Horse Racing Commission has scheduled a Monday hearing, and the New Jersey Casino Control Commission will be holding a Wednesday meeting.
Eldorado’s takeover of Caesars
The merger agreement between Eldorado and Caesars was valued at about $17.3bn when it was first announced in June 2019. The newly combined business will be using the Caesars brand and taking on total debt of about $14bn. If the deal goes ahead, it will turn Eldorado into the largest casino operator in the United States.
The deadline for the merger completion was March 25, 2020, but there have been numerous road bumps along the way. Eldorado has since been paying Caesars daily ticking fees for each month that passes over the initially agreed date. If the deal were to fall through, it would cost Eldorado $836.8m.