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US – Caesars and Eldorado in talks over possible merger

By - 19 March 2019

Caesars Entertainment is believed to be in the very early stages of merger talks with Eldorado Resorts.

A source said that Caesars was providing limited confidential financial information to Eldorado, which is carrying out due diligence on the potential combination.

Billionaire investor Carl Icahn, who has recently increased his stake in Caesars to 17.8 per cent, has lobbied for a sale. Eldorado has not yet made an official offer for Caesars. Caesars and Eldorado have market caps of $5.4bn and $3.6bn, respectively, although both operators carry heavy debt loads. Having emerged from bankruptcy due to debts of $25bn, Caesars is now expected to have debt of $9.1bn whilst Eldorado has debt of $3.3bn.

Analysts at Roch Capital Partners said: “The universe of buyers (for Caesars) is limited, and Eldorado is best suited to extract full value from Caesars’ assets in our view.”

Last year, Caesars rejected a merger approach by Tilman Fertitta, the owner of Golden Nugget casinos.

Caesars owns 53 casinos in 14 US states and five countries outside the United States, whilst Eldorado operates 26 properties in 12 US states, including Ohio, Louisiana, Nevada, Pennsylvania, and West Virginia.

The operator is believed to be worth $3.52bn and owns venues such as Eldorado Resort Casino Reno, Silver Legacy Resort Casino, Circus Circus Reno, Red River in Shreveport, Louisiana and Mountaineer Casino, Racetrack & Resort.

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