Carl Icahn's company struck an approximately $1.85 billion deal Monday that would fuse the gambling and hotel operations of Tropicana Entertainment to Eldorado Resorts Inc.
Continue Reading Below
The agreement includes the sale of Tropicana Entertainment Inc.'s real estate to Gaming and Leisure Properties Inc. It doesn't include Tropicana's Aruba assets, which will be disposed of as a condition to closing.
Icahn Enterprises initially bought a stake in Tropicana in 2008. The Las Vegas company currently owns and runs eight casinos and resorts.
Eldorado Resorts is acquiring the operating assets of seven casinos in six states, including two in Nevada — the Tropicana Laughlin Hotel and Casino and the MontBleu Casino Resort & Spa in South Lake Tahoe — as well as casinos in Indiana (Tropicana Evansville); Louisiana (Belle of Baton Rouge Casino & Hotel); Mississippi (Trop Casino Greenville); Missouri (Lumière Place); and New Jersey (Tropicana Casino and Resort, Atlantic City).
These properties include approximately 7,900 slot machines, 265 table games and 5,400 hotel rooms plus dining, retail and entertainment amenities. Upon completion of all pending transactions, Eldorado's property portfolio will feature about 26,800 slot machines and VLTs, more than 800 table games and over 12,500 hotel rooms.
"The acquisition of seven Tropicana Entertainment properties will allow Eldorado to enter two new gaming jurisdictions and deliver additional financial and geographic diversity to our operating base," said company chairman and CEO Gary Carano.
Icahn said that when he acquired an interest in Tropicana in 2008, it was bankrupt yet undervalued. "By hiring a great CEO in Tony Rodio and a great management team, and by reinvesting every single penny of profits back into the company, we turned Tropicana into a great casino company."
The deal is targeted to close during the second half of the year.
Eldorado said the Tropicana properties are in excellent shape, and does not anticipate needing to invest significant money into them. It said the Aruba property was not included in the sale because Eldorado does not believe it would be worth acquiring.
The company said it enters the Atlantic City market realizing it is about to expand with the re-opening of two shuttered casinos that will increase the amount of properties to nine, but feels it can operate the Tropicana Atlantic City profitably. That casino recently became the No. 2 casino in Atlantic City in terms of gambling revenue, trailing only the Borgata.
Eldorado also announced Monday it is buying the Grand Victoria Casino in Elgin, Illinois from MGM Resorts International for $327.5 million in cash.
In Atlantic City, Icahn still owns the shuttered former Trump Plaza Hotel and Casino, which shut down in 2014.
Follow Wayne Parry at http://twitter.com/WayneParryAC