Eldorado Resorts To Buy Isle of Capri Casinos For $23 A Share

Eldorado Resorts, Inc. ERI and Isle of Capri Casinos, Inc. ISLE struck a merger deal through which the former would buy the latter for $23 a share in cash or 1.638 shares. The total transaction is worth about $1.7 billion that included long-term debt of $929 million. Following this, ISLE stock jumped about 29 percent. Eldorado indicated that the exchange ratio for stock consideration is fixed and was determined based on its 30-trading day volume weighted average price as of September 18 of $14.04. While the cash component is capped at 58 percent, the remaining 42 percent would be in the form of Eldorado common stock. The company expects the transaction to be accretive immediately to its free cash flow and EPS, including cost synergies of approximately $35 million in the first year. The company believes that it could gain from increased geographic and operational diversity with the addition of 13 casino-resorts for a total of 20 properties in spread across in ten States. Eldorado chairman and CEO, Gary Carano, said, "The acquisition of Isle of Capri represents a transformational growth opportunity for Eldorado and is a significant milestone in the successful ongoing execution of our long-term strategy to opportunistically expand our regional gaming platform through accretive acquisitions." The transaction is expected to be consummated in the second quarter of the fiscal year 2017. Following this, ISLE advanced $5.02, or 29.65 percent, to $21.95 in the pre-market trading on Monday. ERI closed at $13.25 on Friday.
Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: NewsM&ATrading IdeasPress ReleasesGeneral
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!