Eldorado to Host Conference Call and Webcast
at 8:30 a.m. ET Today
Eldorado Resorts, Inc. (NASDAQ: ERI) (“Eldorado” or the
“Company”) announced today that it entered into a definitive
agreement to acquire Tropicana Entertainment Inc. (OTCQB: TPCA)
(“Tropicana”) in a cash transaction that is valued at $1.85
billion. The definitive agreement provides that Gaming and Leisure
Properties (NASDAQ: GLPI) (“GLPI”) will pay $1.21 billion,
excluding taxes and expenses, for substantially all of Tropicana’s
real estate and enter into a master lease with Eldorado for the
acquired real estate and that Eldorado will fund the remaining $640
million of cash consideration payable in the acquisition. The
transaction is expected to be immediately accretive to Eldorado’s
free cash flow and diluted earnings per share, inclusive of
identified expected cost synergies of approximately $40 million in
the first year following its completion and when giving effect to
the lease transaction described below.
Pursuant to the transaction, GLPI is expected to acquire the
real estate associated with the Tropicana property portfolio,
except the MontBleu Casino Resort & Spa in South Lake Tahoe and
the Tropicana Aruba Resort and Casino. Following the acquisition of
the real estate portfolio by GLPI, Eldorado will enter into a
triple net master lease for the acquired properties with an initial
term of 15 years, with renewals of up to 20 years at the Eldorado’s
option. The initial annual rent under the terms of the lease is
expected to be approximately $110 million. Tropicana intends to
dispose of Tropicana Aruba Resort and Casino prior to closing.
Eldorado’s net purchase price after the application of
Tropicana’s expected net cash on hand and cash flow generated from
operations through closing represents an estimated trailing twelve
months EBITDA multiple of approximately 6.6x at closing. Including
the $40 million of identified cost synergies, the purchase price
multiple is expected to be below 5.0x. The board of directors of
each of Eldorado, GLPI and Tropicana approved the transaction,
which is expected to close by the end of 2018, subject to receipt
of required regulatory approvals and satisfaction of other
customary closing conditions.
Eldorado intends to fund the transaction consideration of
approximately $640 million payable by Eldorado and repay debt
outstanding under Tropicana’s credit facility with cash generated
from its current operations, proceeds from pending asset sales,
Tropicana’s cash on hand, cash flow generated from Tropicana
operations through closing and $600 million of committed debt
financing from J.P. Morgan.
Eldorado Resorts is acquiring the operating assets of seven
casinos in six states, including two in Nevada – the Tropicana
Laughlin Hotel and Casino and the MontBleu Casino Resort & Spa
in South Lake Tahoe – as well as casinos in Indiana (Tropicana
Evansville), Louisiana (Belle of Baton Rouge Casino & Hotel),
Mississippi (Trop Casino Greenville), Missouri (Lumière Place) and
New Jersey (Tropicana Casino and Resort, Atlantic City). These
properties include approximately 7,900 slot machines, 265 table
games and approximately 5,400 hotel rooms along with a number of
dining, retail and entertainment amenities. Upon completion of all
pending transactions, Eldorado’s expanded property portfolio will
feature approximately 26,800 slot machines and VLTs, more than 800
table games and over 12,500 hotel rooms.
Gary Carano, Chairman and Chief Executive Officer of Eldorado,
commented, “With our proposed acquisition of Tropicana
Entertainment, Eldorado Resorts is yet again pursuing a large
transaction that is expected to be accretive, further increase the
scale of our regional gaming platform and drive free cash flow
growth. Our recent initiatives to enhance shareholder value,
including the Tropicana transaction and our agreement to divest two
properties, reflect significant milestones in the successful
ongoing execution of our long-term strategy to opportunistically
expand our regional gaming platform. Over the last twelve months,
we have created tremendous shareholder value through our ability to
realize and exceed the anticipated synergies from the Isle of Capri
transaction which quickly reduced our initial purchase price
multiple and we expect to achieve the same with the Tropicana
transaction.
“The acquisition of seven Tropicana Entertainment properties
will allow Eldorado to enter two new gaming jurisdictions and
deliver additional financial and geographic diversity to our
operating base. We have identified $40 million of synergies that we
expect to realize in the first year of our ownership. We believe
the financing structure for the transaction, which includes the
participation of a real estate investment trust, represents an
innovative means to drive growth and add value for our shareholders
while maintaining financial flexibility as we continue to own the
majority of the underlying real estate across our remaining
property portfolio.
“As we have done over the past several years with other major
transactions, Eldorado Resorts intends to implement our proven
strategy of enhancing margins by further improving customer service
and the customer experience while focusing on promotion and other
spending in all areas of the newly acquired properties. Overall,
the Tropicana portfolio is in good shape and we have no immediate
significant capex plans for the properties. Ultimately, we believe
that the addition of the highly complementary Tropicana
Entertainment assets to the Eldorado Resorts family of properties
will result in attractive near- and long-term growth for Eldorado
and another opportunity to create new value for shareholders.”
Milbank Tweed Hadley & McCloy LLP is acting as legal counsel
to Eldorado in connection with the proposed transaction.
Conference Call, Webcast, Investor Presentation
Eldorado Resorts will host a conference call today, April 16, at
8:30 a.m. ET to review the transaction and host a question and
answer session. To access the conference call, interested parties
may dial 719/325-4750 (domestic callers) or 888/427-9411
(international callers). The Conference ID Number is 6357721.
Participants can also listen to a live webcast of the call from
Eldorado’s website at ir.eldoradoresorts.com. During the conference
call and webcast, management will review a presentation summarizing
the proposed transaction which can be accessed at
ir.eldoradoresorts.com. A webcast replay will be available for 90
days following the live event at ir.eldoradoresorts.com. Please
call five minutes in advance to ensure that you are connected.
Questions and answers will be taken only from participants on the
conference call. For the webcast, please allow 15 minutes to
register, download and install any necessary software.
About Eldorado Resorts, Inc.
Eldorado Resorts is a leading casino entertainment company that
owns and operates twenty properties in ten states, including
Colorado, Florida, Iowa, Louisiana, Mississippi, Missouri, Nevada,
Ohio, Pennsylvania and West Virginia. In aggregate, Eldorado’s
properties feature approximately 21,000 slot machines and VLTs and
600 table games, and over 7,000 hotel rooms. For more information,
please visit www.eldoradoresorts.com.
About Tropicana Entertainment Inc.
Tropicana Entertainment Inc. (OTCQB: TPCA) is a publicly traded
company that, through its subsidiaries, owns and operates eight
casinos and resorts in Indiana, Louisiana, Missouri, Mississippi,
Nevada, New Jersey and Aruba. Tropicana properties collectively
have approximately 5,525 rooms, 8,035 slot positions and 304 table
games. The company is based in Las Vegas, Nevada. Tropicana is a
majority-owned subsidiary of Icahn Enterprises, L.P. (NASDAQ: IEP).
To learn more about Tropicana, visit www.Tropicanacasinos.com.
Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements include statements regarding
our strategies, objectives and plans for future development or
acquisitions of properties or operations, as well as expectations,
future operating results and other information that is not
historical information. When used in this press release, the terms
or phrases such as “anticipates,” “believes,” “projects,” “plans,”
“intends,” “expects,” “might,” “may,” “estimates,” “could,”
“should,” “would,” “will likely continue,” and variations of such
words or similar expressions are intended to identify
forward-looking statements. Although our expectations, beliefs and
projections are expressed in good faith and with what we believe is
a reasonable basis, there can be no assurance that these
expectations, beliefs and projections will be realized. There are a
number of risks and uncertainties that could cause our actual
results to differ materially from those expressed in the
forward-looking statements which are included elsewhere in this
press release. Such risks, uncertainties and other important
factors include, but are not limited to: (a) our ability to obtain
required regulatory approvals (including approval from gaming
regulators and expiration of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976) and satisfy
or waive other closing conditions to consummate the acquisition on
a timely basis; (b) the possibility that the acquisition of
Tropicana does not close on the terms described herein or that we
are required to modify aspects of the proposed acquisition to
obtain regulatory approval; (c) our ability to promptly and
effectively implement our operating strategies at the acquired
properties and integrate the business of Eldorado and Tropicana to
realize the synergies contemplated by the proposed acquisition; (d)
our ability to obtain debt financing on the terms expected, or at
all, and timely receive proceeds from assets sales to fund the
acquisition; (e) the possibility that the business of Tropicana may
suffer as a result of the announcement of the transaction; (f) the
ability to retain key employees of Tropicana; (g) the outcome of
legal proceedings that may be instituted as a result of the
proposed transaction; and (h) other risks and uncertainties
described in our reports on Form 10-K, Form 10-Q and Form 8-K filed
with the Securities and Exchange Commission.
In light of these and other risks, uncertainties and
assumptions, the forward-looking events discussed in this press
release might not occur. These forward-looking statements speak
only as of the date of this press release, even if subsequently
made available on our website or otherwise, and we do not intend to
update publicly any forward-looking statement to reflect events or
circumstances that occur after the date on which the statement is
made, except as may be required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180416005420/en/
Eldorado Resorts, Inc.Thomas Reeg,
775-328-0112Presidentinvestorrelations@eldoradoresorts.comorJCIRJoseph
N. Jaffoni, James Leahy, 212-835-8500eri@jcir.com
Caesars Entertainment (NASDAQ:CZR)
Historical Stock Chart
From Mar 2024 to Apr 2024
Caesars Entertainment (NASDAQ:CZR)
Historical Stock Chart
From Apr 2023 to Apr 2024