Caesars Entertainment to merge with interactive division
Merger will see interactive business brought under Caesars Entertainment as gaming giant looks to secure long-term future
Caesars Entertainment and Caesars Acquisition Company, which includes the operator’s interactive gaming business, have entered a definitive agreement to merge in an all-stock transaction as the gaming giant looks to safeguard its long-term future.
Following the completion of the merger, Caesars Entertainment will own “a collection of high growth assets” including Caesars Palace in Las Vegas and 11 other land-based properties, plus a majority stake in Caesars Interactive Entertainment, which includes its WSOP.com brand and social casino studios.
Caesars said the planned merger would also help with the re-structuring of its Caesars Entertainment Operating Company business, which earlier this year entered into an agreement with its first lien noteholders to reduce debt and interest payments.
“The merger of Caesars Entertainment and Caesars Acquisition solidifies our focus on owning assets in destination and high-growth markets and businesses, while maintaining the benefits of operating our network and the Total Rewards loyalty program,” Gary Loveman, Caesars Entertainment CEO, said.
“Upon completion of the merger and restructuring, Caesars Entertainment entities will be financially strong, with significantly reduced leverage and a much simpler and straightforward corporate structure,” he added.
On a pro-forma basis the merged company will have a market capitalization of $3.2bn, with a combined cash balance of $1.7bn. Caesars said the merged company, would provide positive free cash flow on a consolidated basis.
Under the merger Loveman will remain as CEO of Caesars Entertainment and has extended his tenure to the end of 2016, while Mitch Garber will continue as Caesars Interactive CEO and will join the board of directors of Caesars Entertainment.