(Bloomberg) -- The Nevada Gaming Commission approved the planned takeover of Caesars Entertainment Corp. by Eldorado Resorts Inc. -- a big step forward for the multibillion-dollar casino merger.
The deal, announced in June of last year, would make Eldorado the largest operator of casinos in the U.S., including marquee resorts such as Caesars Palace and Paris in Las Vegas. It's a giant leap for the company, which until recently was a small, family-run casino business headquartered in Reno, Nevada.
The Federal Trade Commission gave its blessing to the deal last month. New Jersey and Indiana still need to complete their reviews.
In a presentation to Nevada's Gaming Control Board Wednesday, Eldorado Chief Executive Officer Tom Reeg said results at the company's properties had exceeded expectations since reopening after the coronavirus-related shutdown.
“The reopenings have gone quite well,” he said. “Demand has been there.”
Group bookings starting in September look “extremely strong,” Reeg said, adding he expects a recovery for Las Vegas in the fourth quarter. His focus post-merger will be to boost results at Caesars' properties and bring Eldorado's casinos into the Caesars customer-loyalty program.
“We think what we're good at is taking existing properties and optimizing operations,” he said.
Cutting Costs
In terms of achieving $500 million in annual expense savings, Reeg said buffets cost the company about $3 million a year per location and probably won't reopen outside of Las Vegas. About 1,000 employees will lose their jobs as a result of the merger, most them at the corporate office in Las Vegas, he said.
Eldorado Chief Financial Officer Bret Yunker reiterated plans to sell two Indiana casinos and a resort on the Las Vegas Strip after the deal closes. Caesars is divesting its international properties, including one in South Africa that already has an interested buyer.
Eldorado is paying a little over $12 a share for Caesars, two-thirds of that in cash, in a deal that valued the target company at more than $17 billion when it was announced. The combined business, which will use the Caesars name, will have about $14 billion in total debt.
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