The Eldorado Resorts – Caesars Entertainment merge continues to unfold. This week, news is coming out that Eldorado is selling two of its casino properties. Experts claim it will help the major gaming company prepare for the upcoming acquisition of Caesars Entertainment.
This sale is not entirely surprising. Earlier this week, we reported on the news that these companies may both begin selling casinos. Today, we’re going to look at which casinos are being sold, and talking about how this will affect Eldorado moving forward.
Deal Between Eldorado Resorts and Caesars Getting Closer
Just a few weeks ago, two of the biggest gambling companies in the United States announced they planned to merge. Eldorado Resorts and Caesars Entertainment had been rumored to join together for years. It was reported that Eldorado agreed to purchase Caesars for more than $17 billion.
Of course, this deal cannot be sealed right away. A number of steps must first be taken, including getting approval from numerous gaming boards across the country. These companies are both working to cut down on costs before the merger is completed, and property sales are one of the best ways to accomplish this.
There are rumors that Caesars plans to sell some of its Las Vegas Strip properties. A number of major Nevada casino operators have announced they are interested in acquiring these casinos. This week, news is coming out that Eldorado Resorts is officially selling two of its properties.
Eldorado Officially Selling Two Casino Properties
The $17 billion paid for Caesars is one of the largest gaming purchases in US history. Obviously, Eldorado is going to be looking for any way to balance their sheets before this money is paid. The company has announced that they are selling two separate casinos to help with this.
One of the casinos is the Isle of Capri located in Kansas City, Missouri. The other is the Lady Luck Casino Vicksburg, located in Vicksburg, Mississippi. Eldorado is gaining a combined $230 for the two casinos.
Union Gaming analysts James McCree commented on the sale today.
“The sale is relatively small compared to the acquisition of Caesars, but it does help free up some balance sheet capacity to help finance the larger acquisition,” he said.
These sales may also be required by law. Once the merge is complete, the new Caesars company will be the largest gaming operator in the US. The Federal Trade Commission will almost certainly force this new company to sell some of its assets.
Even after losing these properties, Caesars will control more than 60 casinos once the deal is complete. Most feel that a Vegas Strip sale is now even more likely to take place in the near future.
Who is Buying These Properties?
Eldorado Resorts has announced that it’s selling these two casinos to Rhode-Island based Twin Rivers Worldwide Holdings Inc. Twin Rivers is quickly growing to become one of the largest gaming companies based on the East Coast. The acquisition of these two properties will help to increase their presence in other states.
Twin Rivers may very well purchase the Vegas Strip casinos rumored to go for sale in the future. Others feel that this company will avoid the Las Vegas area, and instead stick to buying regional properties. Only time will tell.
The sale of these two casino is certainly having an impact on Eldorado Resorts and Caesars Entertainment. Eldorado’s stock dropped by 3.8% to $45.54 today. Caesars stock lowered by 1.1% to $11.85. Ultimately, it’s the right decision to make before this historical merge taking place in 2020.
There are some big changes coming to the US casino industry. Many states are beginning to legalize online casino gambling and even more are opening their sports betting markets. Make sure to stay tuned for updates on this situation as they unfold!