Eldorado Resorts and Caesars Entertainment traveled the United States to obtain approval from all relevant regulators for the merger. The process was proceeding smoothly without any significant issues until the international Covid-19 coronavirus pandemic complicated matters.
Although only a few authorities remain to approve the merger, it’s unclear when it will become final. In the meantime, Eldorado Resorts has already begun accumulating cash by closing several major deals. In total, the group has raised $1.2 billion.
Two agreements signed with Vici Properties
One of the major deals Eldorado Resorts completed was with the real estate investment fund Vici Properties , which is already established in the casino sector. The two companies signed a five-year mortgage agreement for the Caesars Forum Convention Center at Caesars Palace , which was valued at $400 million. In addition, Vici Properties will purchase about ten hectares of undeveloped land in the middle of the Las Vegas Strip for a total of over $100 million. No one yet knows what the land will be used for. However, some observers believe that the construction of a water park would be a possibility. We’ll have to wait a little longer to find out if these experts are right.
The sale of 18 million shares
Another transaction announced by Eldorado Resorts to raise cash to finalize its merger with Caesars Entertainment must have displeased investors. The group is preparing to sell 18 million of its shares, which will dilute the value of existing shares. The consequences of this announcement have already been felt in the financial markets. Nevertheless, through this transaction, Eldorado Resorts should be able to recover approximately $692 million in cash.
Authorizations still required
In addition to these financial transactions, the Eldorado Resorts and Caesars Entertainment groups are still seeking approval from certain regulatory authorities for the merger. Approval is pending from agencies in Nevada, New Jersey, and Indiana, as well as from the Federal Trade Commission (FTC). It is known that the New Jersey regulator has requested some time to review the matter, and that the Indiana regulator expects to make a decision next July.
An agreement with Gaming and Leisure Properties
Finally, we learned on Monday, June 15, that the Eldorado Resorts group had just scored a major coup by signing an agreement with the real estate investment trust Gaming and Leisure Properties. The latter has committed to not increasing the rent of a complex whose real estate assets it owns, during this year and the next. Furthermore, the rent will only increase by 1.25% in 2022 and 2023, by 1.75% in 2024 and 2025, and by 2% starting in 2026.
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