Eldorado Resorts joins big leagues with $8.5 billion Caesars buy

by   |  VIEW 279
Eldorado Resorts joins big leagues with $8.5 billion Caesars buy

On Monday, the 24th of June 2019, the US-based casino operator, Eldorado Resorts had made a public statement saying that it had reached an $8.5 billion cash and stock buyout deal for rival Caesars Entertainment Corp., as the casino-chain operator had been scaling up its operators to take on larger casino business rivals such as Las Vegas Sands alongside Wynn Resorts.

As a matter of fact, the deal came forth after three months Caesars had agreed to give billionaire investor Carl Icahn three of its management board seats and a say on selection of its next Chief Executive Officer. Besides, Icahn, who had been a key oscillator behind Eldorado Resort’s buyout deal for Caesars, held about 14.75 percent stake in Caesars as of May 31st, data from Refinitv Eikon revealed.

Followed by the announcement, shares of Eldorado, which had surged 41.4 percent this year so far, took a tumble of 13.2 percent to settle at $44.45, while shares of Caesars, which was up by 47 percent this year, surged 11.2 percent to $14.51 on Monday (June 24th) market wrap up.

As the company’s share price soared more than 10 times of its IPO value since it went public back in 2014, outperforming Las Vegas Sands, Wynn Resorts and MGM resorts, a Jefferies’ analysts David Katz said, “Eldorado has proven its ability to execute. ... We expect the long-term positives (of the deal) could prove out”.