What do you do when you want to double your presence as a gaming company while at the same time dealing with your arch rival in the business? Well, according to Eldorado Resorts Inc, you buy off your opponent. The company which trades as NASDAQ:ERI in the stock exchange has made a $1.7 billion offer to Isle of Capri Casinos, a rival gaming company. The deal, which includes close to $1 billion that will go towards settling Capri Casino’s debt, is expected to close by the second quarter of next year.
The company estimates that they will own 20 properties across various states in the country after acquiring the second company, a deal which will increase the number of stations operated by Eldorado by more than 50 percent.
When the deal is successful, Eldorado will own:
• 20,800 video lottery terminals and slot machines
• 6,500 or more hotel rooms
• 560 table games
The CEO to Eldorado was very ecstatic about the acquisition. He stated that it was the best way to build the level of their operation while diversifying the reach of their company without creating an overlap with the stations that are already in existence.
According to the new agreement, the partners who owned the second company will know have a 38 percent stake on the combined company while the Eldorado will control the remaining 62 percent. It is expected that this merger will save the second company from the losses they have been making and that the profits will increase. Eldorado estimates that they could make $35 million or more within the first year of the merger. The early shares of Isla of Capri did go up to 32 percent; however, the sales at Eldorado remained at 14.30 percent.
This is said to be one of the best deals that have happened in the gaming world. Even though currently, the only people who seem to be winning are those that had bought shares with isle, it is estimated that by the end of the day, everyone will be a winner.
About Eldorado resorts
The company was established in 1973 in Reno. Their main purpose was to provide gaming facilities, hotel and accommodation options and entertainment. Today, the family owns a group of casinos which are located in different places across the country. The owners of the enterprise, the Carano family state that even though the business is doing really well, raking in the numbers has never been and will never be more important than customer service and the values they believe in as a family.
Don Carrano, the founder of the enterprise had been warned sternly against establishing a hotel casino anywhere north of the train tracks that intersect Reno. His vision did not allow people to deter him. When he made the establishments, he wanted a place where traditional family values would be protected. He believed that for good things to happen, people in a family or team had to work together towards a common goal. These are the values that he brought into the business and if you look at the current state of the business, it does reflect integrity, service and quality.