Eldorado Resorts to Sell 2 Casinos for $155M
- Apr 28, 2020
Eldorado Resorts Inc. has found a new buyer for the Eldorado Shreveport Resort & Casino in Shreveport, La., and the MontBleu Resort Casino & Spa in Lake Tahoe, Nev. The company has inked an agreement to sell the two gaming properties to Twin River Worldwide Holdings Inc. for $155 million in cash.
News of Eldorado’s deal with Twin River comes on the heels of the collapse of a previous arrangement to sell the properties to Maverick Gaming. Maverick had agreed in January 2020 to a $230 million purchase of Shreveport and in March, the company had signed on to acquire MontBleu. Just days ago, Maverick announced its decision to cancel its planned purchase of Shreveport and MontBleu. Now, Maverick’s relinquishment is Twin River’s gain. “We have a portfolio of assets that lines up favorably with just about anybody out there,” Thomas Reeg, CEO of Eldorado Resorts Inc., said during the company’s fourth quarter 2019 earnings conference call on February 26.
With the disposition of Shreveport, Eldorado will be parting with its very first purchase outside its Reno, Nev., home base. The company acquired the property, formerly the Hollywood Casino, out of bankruptcy in 2005. Originally developed in 2000 at a cost of more than $230 million, Shreveport comprises a tri-level riverboat casino with 30,000 square feet of gaming space, a 403-key Art Deco-style hotel, 6,000 square feet of convention space and several eateries. The property attracts visitors from the feeder markets of Dallas/Fort Worth and the East Texas region.
Eldorado came into possession of MontBleu’s operations in 2018 with the approximately $1.9 billion acquisition of Tropicana Entertainment Inc. and its seven-asset portfolio. MontBleu made its debut in 2006, and later in 2015 the property underwent a sweeping $25 million renovation. The 21-acre gaming destination features a 45,000-square-foot casino, a 437-key hotel, a 16,000-square-foot spa, 14,000 square feet of flexible convention and meeting space, as well as dining, retail and entertainment options and a 110-seat wedding chapel.
Under the terms of the sales agreement, Twin River will pay Eldorado $140 million on the transaction closing date for Shreveport’s operations and real estate and MontBleu’s operations. The company will deliver the remaining $15 million within one year of the closing date.
The Caesars connection
Eldorado’s disposition of the Shreveport and MontBleu properties is contingent upon consummation of its pending $17.3 billion acquisition of Caesars Entertainment Corp. Eldorado plans to finance the merger with $7.2 billion in cash, including $385 million of announced asset sales proceeds, 77 million Eldorado shares and the assumption of Caesars’ outstanding debt.
“We are 100 percent focused on getting Caesars done. There is absolutely zero risk on the financing side,” Reeg said during the earnings conference call. “We continue to work through the licensing process, the FTC process. We can see the finish line from here.” Eldorado expects to complete the Caesars transaction in the first half of 2020 and close the Shreveport and MontBleu disposition in 2021.