Eldorado Resorts buys rival Caesars for about $8.58bn

Eldorado Resorts is buying Caesars Entertainment for about $8.58 billion in a deal backed by activist billionaire Carl Icahn that will create the largest US gaming operator.

The agreed equity value of $12.75 a share – in a mix of cash and Eldorado stock – a premium of about 28 per cent to Caesars’s Friday closing price. Including debt, the deal is worth approximately $17.3 billion, the companies said in a statement.

Caesars shares rose almost 15 per cent in late morning US trade while Eldorado dropped 8.3 per cent.

Casino and hotel operator Caesars had been pushed to consider a sale by Mr Icahn, its biggest shareholder. Earlier discussions had focused on a deal that would have valued Caesars at $11 a share, a person familiar with those talks had said.

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Caesars, whose properties include the flagship Caesars Palace and the Harrah’s chain, is still coping with the fallout of a 2008 leveraged buyout led by Apollo Global Management and TPG that left it with a mountain of debt.

The company completed a bankruptcy of its largest unit two years ago that brought in new board members and shareholders, including distressed-debt investors. Apollo and TPG have sold their shares. – Bloomberg