Item 1.01
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Entry into a Material Definitive Agreement
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On April 15, 2018, Eldorado Resorts,
Inc., a Nevada corporation (the Company), and Delta Merger Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of the Company, entered into an Agreement and Plan of Merger (the Merger Agreement) with GLP
Capital, L.P., a Pennsylvania limited partnership that is the operating partnership of Gaming and Leisure Properties, Inc. (GLP), and Tropicana Entertainment Inc., a Delaware corporation (Tropicana), pursuant to which
(i) GLP will purchase substantially all of the real property assets owned by Tropicana, other than the MontBleu Casino Resort & Spa and the Tropicana Aruba Resort and Casino, for $1.21 billion pursuant to a Real Estate Purchase
Agreement by and between Tropicana and GLP (the Real Estate Sale) and (ii) immediately following the consummation of the Real Estate Sale, the Companys wholly owned subsidiary will merge with and into Tropicana, with Tropicana
as the surviving entity (the Merger and, together with the Real Estate Purchase, the Tropicana Transaction). Following the consummation of the Merger, Tropicana will be a wholly owned subsidiary of the Company. The
consideration payable in the Merger will be funded by approximately $640 million of cash consideration to be provided by the Company and the proceeds received by Tropicana from the Real Estate Sale. The Company has received committed financing
for the transaction totaling $600 million from J.P. Morgan Chase Bank N.A. The obligation of the Company to consummate the Merger is not subject to a financing condition.
Subject to and immediately following the consummation of the Merger, the Company will cause Tropicana to enter into a triple net
master lease for the properties acquired by GLP. The master lease will have a
15-year
initial term with up to four five-year renewal periods. The initial annual rent under the terms of the master lease is
expected to be approximately $110 million.
The closing of the Merger is conditioned upon, and will occur immediately following, the
consummation of the Real Estate Sale. Consummation of the Tropicana Transaction is subject to customary conditions, including, among other things, (i) the absence of any injunction or order preventing the Tropicana Transaction,
(ii) receipt of regulatory approvals, including applicable gaming regulatory approvals, (iii) accuracy of the respective parties representations and warranties, and (iv) compliance by the parties with their respective covenants
and obligations. Consummation of the Tropicana Transaction is also subject to the delivery by American Entertainment Properties Corp., an 83.9% stockholder of Tropicana, of its irrevocable and unconditional consent no later than the 30 days
following the date of the Merger Agreement. On April 15, 2018, concurrently with the execution of the Merger Agreement, American Entertainment Properties Corp. and certain of its affiliates entered into a voting agreement pursuant to which such
parties agreed, on the terms and subject to the conditions set forth therein, to timely deliver a written consent approving the Tropicana Transaction, provided that the Merger Agreement has not been earlier terminated.
The Merger Agreement may be terminated by the Company, GLP or Tropicana under certain circumstances, including if (i) closing does not
occur by the date that is nine months from the date of the Merger Agreement, subject to two three-month extensions under certain circumstances, (ii) there is a material breach by a party (subject to a
30-day
cure period), or (iii) there is a final,
non-appealable
order preventing the closing. In addition, the Company and GLP can terminate the Merger Agreement if
the significant stockholder consent described above is not timely delivered and, in certain circumstances, Tropicana can terminate the Merger Agreement at the direction of its board of directors in exercise of its fiduciary obligations to
shareholders. In either such case, Tropicana will be required to pay an aggregate termination fee of $92.5 million. If the Merger Agreement is terminated as a result of the failure to receive regulatory approvals or due to a material breach by
the Company or GLP, then the Company and GLP will be jointly and severally required to pay Tropicana an aggregate termination fee of $92.5 million. The parties will also be entitled to seek all remedies available at law or in equity against the
other, including specific performance.
A copy of the Merger Agreement is attached hereto as Exhibit 2.1 and is incorporated herein by
reference. The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement.