Item 7.01.
|
Regulation FD Disclosure.
|
The information contained in this Item 7.01, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed filed for the
purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any registration statement or
other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference to such filing.
Notes Offering
Eldorado Resorts, Inc., a Nevada
corporation (ERI or the Company), previously announced that ERI, Delta Merger Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of the Company (Escrow Issuer), 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), entered into an Agreement and Plan of
Merger (the Merger Agreement) on April 15, 2018 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 (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 Tropicana Acquisition). Following the consummation of the Merger, Tropicana will be a wholly owned subsidiary of the Company.
On
September 6, 2018, ERI announced that it and Escrow Issuer intended to offer senior notes (the Notes) to finance a portion of the consideration payable in connection with the Tropicana Acquisition. Set forth below is certain
information provided to potential lenders in the proposed financing. Unless the context otherwise requires, references in this current report on Form
8-K
to the Registrant,
ERI, we, our and us refer to Eldorado Resorts, Inc. and its consolidated subsidiaries, including Tropicana and its subsidiaries following consummation of
the Tropicana Acquisition. As used herein, (i) Acquisitions means, together, (A) the Tropicana Acquisition and (B) the Companys acquisition of Elgin Riverboat Resort-Riverboat Casino, an Illinois general partnership
(Elgin) that occurred on August 7, 2018 (the Elgin Acquisition) and (ii) Dispositions means, together (A) the Companys previously announced disposititions of Presque Isle Downs and Lady Luck Casino
Nemacolin.
|
(i)
|
Business Strengths and Strategy
|
Increased scale and financial profile
We believe that
the Tropicana Acquisition will add complementary regional gaming assets to our existing portfolio and will strengthen our financial profile by enhancing the size, scale and diversification of our operations. We anticipate that the Acquisitions will
enhance our footprint in attractive markets by increasing the gaming geographies of operation and increasing the number of properties from eighteen to
twenty-six,
after giving effect to the Dispositions. We
also anticipate that the Acquisitions will strengthen our financial profile, creating a combined company with approximately $2.7 billion of combined net revenues for the twelve months ended June 30, 2018 (after giving effect to the
Acquisitions and the Dispositions (representing a 49% increase from ERI prior to giving effect to the Acquisitions and the Dispositions)) and approximately $641.5 million of combined Adjusted EBITDA (after giving effect to the Acquisitions
(excluding Tropicana Aruba, as it is not part of the acquisition of Tropicana by ERI) and the Dispositions (but prior to taking into account (x) the annual rent payments under the Master Lease that are expected to be approximately
$87.6 million, and (y) the anticipated cost savings, which we estimate to be approximately $55 million between the Tropicana Acquisition and the Elgin Acquisition), in each case, for the twelve months ended June 30, 2018
(representing a 50% increase from ERI prior to giving effect to the Acquisitions and the Dispositions)), making the Company the nations fourth largest regional owner-operator of self-owned casinos based on net revenues and Adjusted EBITDA, in
each case, for the twelve months ended June 30, 2018.
In addition, after giving effect to the Acquisitions and the Dispositions, the Company is
anticipated to have, in the aggregate, approximately 12,600 hotel rooms (a 76% increase from ERI prior to the Acquisitions and the Dispositions), approximately 850 table and poker games (a 48% increase from ERI prior to the Acquisitions and the
Dispositions) and approximately 27,900 slot machines and VLTs (a 32% increase from ERI prior to the Acquisitions and the Dispositions).
Increased
scale and diverse portfolio across key geographic markets and customer segments
We are geographically diversified across the United States. After
giving pro forma effect to the Acquisitions (excluding Tropicana Aruba, as it is not part of the acquisition of Tropicana by ERI) and the Dispositions (but prior to taking into account (x) the annual rent payments under the Master Lease that
are expected to be approximately $87.6 million, and (y) the anticipated cost savings, which we estimate to be approximately $55 million between the Tropicana Acquisition and the Elgin Acquisition), no single state accounted for more
than 16.6% of our combined Adjusted EBITDA (excluding corporate) for the twelve months ended June 30, 2018. Our customer pool draws from a diversified base of both local and
out-of-town
patrons. For example, approximately 20% of our customer base at Eldorado Reno is local, while 80% visit from
out-of-town
and utilize our hotel, restaurants and other amenities for a full-service gaming experience. We have also initiated changes to our marketing strategy to reach more profitable customers through
targeted direct mailings and electronic marketing. We believe we have assembled a platform on which we can continue to grow and provide a differentiated customer experience.