Eldorado Resorts will buy Caesars in a cash-and-stock deal valued at $17.3 billion US, creating a casino giant.
The acquisition Monday puts about 60 casinos and resorts in 16 states under a single name, one of the biggest gambling and entertainment ventures in the United States.
“Together, we will have an extremely powerful suite of iconic gaming and entertainment brands, as well as valuable strategic alliances with industry leaders in sports betting and online gaming,” Eldorado CEO Tom Reeg said in a prepared statement.
The company, which will be called Caesars, will be led by Reeg, along with Eldorado Chairman Gary Carano. It will be based in Reno Nevada, where Eldorado is based, with a “significant corporate presence” in Las Vegas, where Caesars is based.
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 transaction values Caesars at about $8.6 billion, and Eldorado will pick up about $8.8 billion of the casino’s debt.
Shareholders of Eldorado Resorts Inc. will hold about 51% of the company’s outstanding stock, with Caesars Entertainment Corp. shareholders holding the remaining and 49%.
Earlier this year, billionaire Carl Icahn revealed an enormous stake in Caesars and pushed for fundamental changes at the company. Caesars, which operates more than 35 casinos in the U.S., emerged from bankruptcy protection in late 2017, but it’s been struggling since.
Casinos have seen a tremendous uptick in revenue, however, with the broad legalization of sports betting.
Eldorado said Monday that it’s also reached a real estate agreement with VICI Properties Inc. in which VICI will acquire the real estate associated with Harrah’s Resort Atlantic City, Harrah’s Laughlin Hotel & Casino, and Harrah’s New Orleans Hotel & Casino for approximately $1.8 billion. Other terms of the deal include VICI being given right of first refusals for whole asset sale or sale-leaseback transactions on two Las Vegas Strip properties and the Horseshoe Casino Baltimore.
The Eldorado-Caesars deal is targeted to close in the first half of next year if approved by gaming regulators and shareholders.
Caesars’ stock jumped 12.2 per cent before the market open, while shares of Eldorado fell 6.6 per cent
CPPIB posts 2.3-per-cent return in second quarter
Canada Pension Plan Investment Board posted a 2.3-per-cent return in the quarter ended Sept. 30, helping it maintain double-digit long-term returns and add nearly $10-billion to its total assets.
CPPIB, the investment manager for the Canada Pension Plan, said its five-year and 10-year returns through Sept. 30 averaged 10.3 and 10.2 per cent over the period, and it closed the quarter with assets of $409.5-billion.
CPPIB didn’t break out returns by asset class, but said the group that actively manages its equity investments, as well as its private-equities division, were “strong contributors.” The Active Equities department picks specific stocks with an aim to outperforming the market, while private equity is the ownership of private companies, often aided by substantial borrowing.
It received “modest gains” from its passive portfolio, a style of investing designed to match the overall market. CPPIB also said it had positive performance in other asset classes, including its bonds, aided by declining interest rates.
A little less than one-third of the fund’s assets are in stocks traded on the public markets. A quarter of the portfolio is private equity.
All return percentages are net of costs, CPPIB said. Because the CPP must serve plan members for decades to come, CPPIB says long-term results “are a more appropriate measure of CPPIB’s investment performance compared to quarterly or annual cycles.”
Canada Pension Plan, founded in 1966, is the primary retirement-security program for working Canadians. The government created CPPIB in 1999 to professionally manage the Plan’s money. The past two decades have seen a shift first from bonds to stocks, then to assets like real estate, infrastructure and private equity. The government projects the CPP Fund will grow to $545-billion in assets by 2025 and $1.5-trillion in assets by 2040.
Major deals in the quarter included buying publicly traded Pattern Energy Group Inc. for US$2.3-billion in cash, valuing the company at US$6.1-billion, including debt. It also struck a deal to merge data-information provider Refinitiv into the London Stock Exchange, valuing Refinitiv at US$27-billion.
Trade mission seeks to calm concerns about forestry downturn
Forests Minister Doug Donaldson says he’s in Asia trying to calm investor concerns about reduced supplies of British Columbia timber for major residential developments and tourism-resort projects in China and Japan.
Donaldson, in a teleconference from Tokyo, says he and 35 senior executives from B.C. forest companies and associations are on a five-day trade mission to Asia that concludes Friday.
He says the Chinese and Japanese are keenly aware of the toll pine beetle infestations and massive wildfires have taken on B.C.’s forests, but business leaders and forests ministry officials are reassuring potential customers the province has abundant supplies of timber.
The Opposition Liberals recently released a document detailing ongoing forest industry struggles, listing almost 60 examples where companies have implemented cost-cutting measures that range from harvest reductions to permanent mill closures.
The detention of top Huawei executive Meng Wanzhou in Canada prompted the minister to postpone his planned participation on a forestry trade mission to China last December.
Donaldson says this week’s trade talks in Japan and China focused only on business.
Union representing SkyTrain workers considers possible strike action
CUPE Local 7000, the union representing 900 SkyTrain workers, says negotiations with the BC Rapid Transit Company (SkyTrain) have reached a deadlock.
CUPE Local 7000 says that there have been more than 40 sessions at the bargaining table since the beginning of May, and that talks broke down Tuesday, Nov. 12. It says that both sides were unable to reach an agreement on several key issues.
“The Company has failed to offer fair wages or address the sick plan, inadequate staffing levels, forced overtime, and other issues important to our members,” said CUPE 7000 President Tony Rebelo.
“We have been more than proactive and flexible in trying to reach solutions to improve the service, but the employer’s latest package failed to address the key issues. They are simply not interested in bargaining seriously, so we’re left with little choice but to go to our members and seek direction for next steps.”
CUPE 7000 represents approximately 900 SkyTrain workers who provide service as SkyTrain attendants and control operators as well as administration, maintenance, and technical staff.
Vancouver Is Awesome reached out to TransLink for comment and will update the story when they have provided comment.
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