Shareholders Approve Eldorado-Caesars Tie-up
The acquisition by Eldorado Resorts, inc. and Caesars Entertainment Corporation (CEC), the parent company of the World Series of Poker, has cleared another hurdle with the near-unanimous approval of the deal by shareholders of both companies. Friday’s votes were held simultaneously in Las Vegas for Caesars shareholders, while Eldorado’s voting business was conducted in Reno, where that company’s headquarters are located.
According to a press statement, the holders of over 99% of the Eldorado shares that voted on the issuance of shares of Eldorado common stock in connection with the $17.3 billion deal approved the acquisition. Those voting on the deal collectively held 87% of Eldorado’s outstanding common stock, thus providing a plurality.
Over at Caesars, the results were the same. Again, the deal received over 99% approval, with those who voted representing approximately 76% of Caesars’ outstanding common stock. Eldorado’s stockholders also approved of the reincorporation of Eldorado Resorts, Inc. from Nevada to Delaware soon after the merger is complete. Pending regulatory approval in multiple states, which both companies believe will occur, the merger is expected to be finalized in early 2020. The deal is set to create the United States’ largest casino-entertainment corporation.
Given the WSOP’s success and long-term profitability, being one of CEC’s best assets, it appears unlikely that Eldorado will rush to change anything in the WSOP’s current business formula. In other words, with the exception of some corporate signage, players will see very little that’s changed for the 2020 edition of the WSOP.
Eldorado, with a 51% overall stake in the eventual merged entity, formally takes over the operation of the WSOP and all other CEC assets just prior to the WSOP’s 2020 running at the Rio All-Suite Hotel & Casino in Las Vegas. What’s new for the 2020 WSOP is that Caesars no longer owns the Rio, having sold the off-strip property in September. Caesars added some cash to its balance sheet by selling the Rio for $516.3 million to an unknown entity related to New York-based Imperial Companies.
Caesars, though, negotiated a forward-looking rental deal for the Rio Convention Center, meaning that the WSOP will remain there for at least the next couple of years. Rumors remain that Caesars’ (and now Eldorado’s) plans may include moving the WSOP to the under-construction Caesars Convention Center at a later date.
Eldorado is set to pay $7.2 billion in cash and 77 million shares of stock to acquire that majority stake. In addition, the joint company still retains Caesars’ massive corporate debt, which nearly buried Caesars several years back. Caesars went into and emerged from a corporate bankruptcy caused by its acquisition last decade in a venture-capital deal that occurred just prior to the collapse of the US real-estate bubble.