Missouri approves Eldorado-Caesars merger, sale of two casinos

The approval Wednesday by the Missouri Gaming Commission marks the first state to weigh in on the transaction that will need approval from roughly 18 states and the Federal Trade Commission.

One potential antitrust issue was eliminated with Missouri approving Eldorado’s sale of Isle Casino Cape Girardeau and Lady Luck Caruthersville to Century Casinos Inc.

In June, the Colorado Springs-based casino operator and real estate investment trust VICI Properties agreed to acquire the two Missouri casinos and the Mountaineer Casino, Racetrack and Resort in West Virginia for a combined $385 million, of which Century is paying $107 million for the operations.

In a statement, Century said is expects the transaction to close at the end of this month.

Eldorado is also in the process selling Isle of Capri Casino Kansas City in Kansas City, Missouri and Lady Luck Casino Vicksburg in Vicksburg, Mississippi for $230 million to Twin River Worldwide Holdings.

When the merger with Caesars is complete, the company will still operate three casinos in Missouri – Lumiere Place in St. Louis, Isle of Capri in Boonville, and Harrah’s North Kansas City.

Shareholders of Caesars and Eldorado approved the merger last month.
The combined company will create a regional gaming giant which currently controls 60 gaming properties in 18 states, including nine in Las Vegas and four of the nine resorts in Atlantic City.

Under terms of the agreement, Eldorado will pay $8.40 per share in cash and 0.0899 shares of Eldorado stock for each Caesars share, or $12.75 per share. The combined business will be called Caesars and its shares will be traded on the Nasdaq.

Both companies, during their recent third quarter earnings commentary, committed to reducing the number of casinos operated in markets where federal anti-trust issues could exist, and reducing overall corporate costs by $500 million. Current Caesars CEO Tony Rodio said last week the company expects to reduce costs by $75 million to $100 million by the time the merger closes.

As part of the merger, three Caesars properties under the Harrah’s brand in Atlantic City, Laughlin, Nevada and New Orleans were sold to real estate investment trust VICI Properties for a combined $1.8 billion. VICI will lease the operations back to Eldorado for total annual rent of $154 million.