Casino operators Caesars Entertainment Corp. and Eldorado Resorts are likely to get later today their final regulatory clearance to complete their proposed $17.3 billion merger.
Members of the New Jersey Casino Control Commission met Wednesday to review the mega-deal and most thought a decision on whether the two companies should combine would be issued by the end of the day.
However, James Plousis, chairman of the three-member regulatory panel, extended the hearing into Thursday.
Five Eldorado executives gave testimony before Mr. Plousis and fellow Commissioner Alisa Cooper for more than six hours Wednesday. Eldorado’s CEO, Tom Reeg, and the company’s COO Anthony Carano and CFO Bret Yunker as well as two other witnesses were heard by New Jersey casino regulators.
Eldorado currently operates Tropicana Atlantic City in Atlantic City, while Caesars runs Caesars Atlantic City, Harrah’s Resort Atlantic City, and Bally’s Atlantic City. In April, Caesars agreed to sell Bally’s to Twin River Worldwide Holdings in a $25 million deal to alleviate competition concerns. The deal is pending.
Aside from the sale of Bally’s, Eldorado and Caesars will have to meet 40 other conditions to secure regulatory approval from the New Jersey Casino Control Commission. Once the deal closes, the combined company will have to plough $400 million in investments over the next three years and to put $125 million into a trust account if the Bally’s deal falls through.
Any Future Job Cuts to Be Cleared by Regulators First
The combined group is required to keep each of its properties open for at least five years. During the Wednesday hearing, Eldorado executives acknowledged that there was understaffing at Atlantic City casinos, but promised that any future lay-offs at the combined group would first be approved by state casino regulators.
The New Jersey Casino Control Commission is the last regulator that needs to approve Eldorado’s tie-up with Caesars. If the board gives the nod to the mega-deal later today, it could close as early as next week.
The deal was first announced in June 2019 and was supposed to close this past March. However, the nationwide closure of properties due to the coronavirus pandemic delayed the finalization of the purchase. Eldorado is paying $2.3 million in daily ticking fees for failing to acquire Caesars by the end of March.
Once the transaction finally closes, Eldorado would retain 56% of the combined casino company. The group will operate and trade as Caesars Entertainment Inc.
The merger was approved by Nevada regulators earlier this month and by Indiana regulators on Friday and Monday. The Federal Trade Commission cleared the deal late last month. Aside from the sale of Bally’s Atlantic City, Eldorado and Caesars will be selling properties in Indiana and possibly a Las Vegas Strip casino resort.
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