If there’s one thing that keeps online gambling reporters busy nowadays, it’s the Eldorado Caesars merger. In fact, even if announced months ago, it’s not final yet.
Indeed, regulators could still block the transaction because the pair would create a huge gambling corporation. And a cooperation that could push the trade equity laws to its limits. But that’s a topic that we’ve extensively covered in the past news. So, in this one, let’s focus on what shareholders would gain if the deal goes through.
After all, the interested parties are meeting on November 15th. And it’s a big day since Eldorado’s investors are gathering in Reno. And Caesars’ shareholders are meeting up at the Tuscana Chapel inside the Vegas casino.
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A new document on the table
Undoubtedly, one of the main points of discussion on November 15th will be a document that was recently signed. A document that once again puts Icahn on center stage.
In fact, on October 4th, the New York billionaire agreed to specific restriction with regards to the 16.83% outstanding equity he holds in Caesars.
Apparently, Icahn agreed to not do anything with his shares that would shift the company value. And that would naturally drastically impact the stock exchange market. But to be safe, certain restrictions are now in place to make sure the sale goes through. And in all fairness it was something that all parties agreed on in previous discussions. So there won’t be any big surprise for the general assembly there.
An over valuation that will not keep everyone happy
Another important point on the agenda, but this time mostly in Reno, is the amount Eldorado will approve to guarantee shares. In essence, Eldorado is ready to give $8.5 billion in cash and stock to Caesars (which is equal to $13 per share). And this prize may make many eyebrows rise. Because most analysts agree that it’s too high since Caesars has $8.8 Million in debts.
But the amount agreed is in line with Icahn’s pre-transaction wishes. And since he had about 28.5% equity in the company (back then), it gave the board little room for maneuver. At least as we understand it…