Churchill Downs Agrees in Principle to
Assume Management of Eldorado Resorts’ Lady Luck Casino
Nemacolin
Eldorado Resorts, Inc. (NASDAQ: ERI) (“Eldorado” or the
“Company”) and Churchill Downs Incorporated (NASDAQ: CHDN)
(“Churchill” or “Churchill Downs”) announced today that they have
terminated their previously announced agreement whereby Churchill
was to acquire substantially all of the assets and properties
associated with Lady Luck Casino in Vicksburg, Mississippi (“Lady
Luck Vicksburg”) and amended their previously announced agreement
whereby Churchill is to acquire substantially all of the assets and
properties associated with Presque Isle Downs & Casino in Erie,
Pennsylvania from Eldorado (collectively, the “Termination and
Amendment Agreements”). Pursuant to the Termination and Amendment
Agreements, Churchill will pay Eldorado a $5.0 million termination
fee, subject to the parties’ execution of a definitive agreement
with respect to the Lady Luck Nemacolin transaction as described
below.
Gary Carano, Chairman and Chief Executive Officer of Eldorado,
commented, “We are delighted to work with the team at Churchill
Downs to move forward with our planned divestiture of Presque Isle
Downs and believe the transfer of the management of Lady Luck
Nemacolin to Churchill will allow Eldorado Resorts to realize
meaningful tax benefits. Additionally, while the termination of the
Lady Luck Vicksburg transaction, including the receipt of the
termination fee, is not meaningful to our Adjusted EBITDA or
leverage expectations given our growing scale, we are pleased that
Lady Luck Vicksburg will remain a part of the Eldorado family going
forward.
“Importantly, our recent agreements to acquire Tropicana
Entertainment and the Grand Victoria Casino in Elgin, Illinois,
both of which are expected to close late this year, are highly
accretive, further increase the scale of our regional gaming
platform and significantly accelerate the Company’s free cash flow
growth. Our most recent initiatives to enhance shareholder value,
including the Tropicana and Grand Victoria transactions and our
agreement with The Cordish Companies to master plan, design and
develop a new world-class, mixed-use entertainment and hospitality
destination adjacent to our Isle Casino Racing Pompano Park in
Florida, reflect our commitment to expand our platform into growth
markets that have the potential for high returns while leveraging
our asset base to build new value for our shareholders.”
On February 28, 2018, Eldorado and Churchill announced two
separate definitive asset purchase agreements to effect the Lady
Luck Vicksburg and Presque Isle transactions for total aggregate
consideration of approximately $229.5 million, subject to certain
working capital and other purchase price adjustments. Under the
terms of the original agreements, Churchill Downs was to purchase
Lady Luck Vicksburg for cash consideration of approximately $50.6
million and Presque Isle Downs & Casino for cash consideration
of approximately $178.9 million. Also, as previously disclosed on
May 7, 2018, Eldorado and Churchill each received a Federal Trade
Commission (the “FTC”) request for additional information and
documentary material (a “Second Request”) pursuant to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the “HSR Act”), in connection with the FTC’s review of the pending
Lady Luck Vicksburg transaction.
Pursuant to the Termination and Amendment Agreements, Eldorado
and Churchill mutually agreed to terminate their respective rights
and obligations with respect to the Lady Luck Vicksburg transaction
and to, among other things: (i) eliminate the consummation of the
Lady Luck Vicksburg transaction as a condition to closing the
Presque Isle transaction, (ii) withdraw the parties’ filings
previously submitted in connection with the HSR Act and submit new
filings pursuant to the HSR Act to reflect the transactions
contemplated by the Termination and Amendment Agreements and, (iii)
cooperate in good faith, subject to certain conditions, to enter
into an agreement pursuant to which Churchill will assume the
operations of Eldorado’s Lady Luck Casino Nemacolin in Farmington,
Pennsylvania for cash consideration of $100,000 (the “Lady Luck
Nemacolin Transaction”). The Presque Isle transaction will continue
to reflect a purchase price of $178.9 million and remains dependent
on customary closing conditions, including the execution of the
definitive agreement with respect to the Lady Luck Nemacolin
Transaction.
Subject to expiration of termination of the waiting period under
the HSR Act, receipt of Pennsylvania regulatory approvals and other
customary closing conditions, Eldorado and Churchill expect the
Presque Isle and Lady Luck Nemacolin transactions to close in the
fourth quarter of 2018.
About Eldorado Resorts, Inc.
Eldorado Resorts is a leading casino entertainment company that
owns and operates twenty properties in ten states, including
Colorado, Florida, Iowa, Louisiana, Mississippi, Missouri, Nevada,
Ohio, Pennsylvania and West Virginia. In aggregate, Eldorado’s
properties feature approximately 21,000 slot machines and VLTs and
600 table games, and over 7,000 hotel rooms. On April 16, 2018, the
Company announced that it entered into acquisition agreements for
Tropicana Entertainment Inc. and the Grand Victoria Casino in
Elgin, IL. The transactions are expected to close in the 2018
fourth quarter. For more information, please visit
www.eldoradoresorts.com.
Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements include statements regarding
our strategies, objectives and plans for future development or
acquisitions of properties or operations, as well as expectations,
future operating results and other information that is not
historical information. When used in this press release, the terms
or phrases such as “anticipates,” “believes,” “projects,” “plans,”
“intends,” “expects,” “might,” “may,” “estimates,” “could,”
“should,” “would,” “will likely continue,” and variations of such
words or similar expressions are intended to identify
forward-looking statements. Although our expectations, beliefs and
projections are expressed in good faith and with what we believe is
a reasonable basis, there can be no assurance that these
expectations, beliefs and projections will be realized. There are a
number of risks and uncertainties that could cause our actual
results to differ materially from those expressed in the
forward-looking statements which are included elsewhere in this
press release. Such risks, uncertainties and other important
factors include, but are not limited to: (a) our ability to
obtain required regulatory approvals (including approval from
gaming regulators and expiration of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976) and satisfy
or waive other closing conditions to consummate the disposition of
Presque Isle Downs and Lady Luck Nemacolin and the acquisition of
Tropicana and the Grand Victoria Casino on a timely basis;
(b) the possibility that the one or more of such transactions
do not close on the terms described herein or that we are required
to modify aspects of one or more of such transactions to obtain
regulatory approval; (c) the possibility that we and Churchill
are unable to enter into a definitive agreement with respect to the
Lady Luck Nemacolin transaction; (d) our ability to develop
the proposed facilities at Isle Casino Racing Pompano Park and
promptly and effectively implement our operating strategies at
Tropicana and the Grand Victoria Casino and integrate our business
and the business of Tropicana and the Grand Victoria Casino to
realize the synergies contemplated by the proposed acquisitions;
(e) our ability to obtain debt financing on the terms
expected, or at all; (f) the possibility that the business of
Tropicana or the Grand Victoria Casino may suffer as a result of
the announcement of the acquisition thereof; (g) our ability
to retain key employees of Tropicana and the Grand Victoria Casino;
(h) the outcome of legal proceedings that may be instituted as
a result of the proposed acquisitions of Tropicana and the Grand
Victoria Casino; (i) and other risks and uncertainties
described in our reports on Form 10-K, Form 10-Q and Form 8-K.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180709005234/en/
Eldorado Resorts, Inc.Thomas Reeg,
775/328-0112Presidentinvestorrelations@eldoradoresorts.comorJCIRJoseph
N. Jaffoni, James Leahy212/835-8500eri@jcir.com
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