RENO, Nev. and ST. LOUIS, Sept. 19,
2016 /PRNewswire/ -- Eldorado Resorts, Inc. (NASDAQ:
ERI) ("Eldorado," "ERI," or "the
Company") and Isle of Capri Casinos, Inc. (NASDAQ: ISLE) ("Isle of
Capri" or "Isle") announced today that they have entered into a
definitive merger agreement whereby Eldorado will acquire all of the outstanding
shares of Isle of Capri for $23.00 in
cash or 1.638 shares of Eldorado common stock, at the election of
each Isle of Capri shareholder, reflecting total consideration of
approximately $1.7 billion, inclusive
of $929 million of long-term debt of
Isle of Capri and its subsidiaries. The exchange ratio for
stock consideration to be issued in the merger is fixed and was
determined based on Eldorado's
30-trading day volume weighted average price as of September 18, 2016 of $14.04. Elections are subject to proration
such that the outstanding shares of Isle common stock will be
exchanged for aggregate consideration comprised of 58% cash and 42%
Eldorado common stock. The
transaction is expected to be immediately accretive to Eldorado's free cash flow and diluted earnings
per share, inclusive of identified cost synergies of approximately
$35 million in the first year
following the completion of the transaction and giving effect to
Isle's previously announced divestiture of Isle of Capri Casino
Hotel Lake Charles. The transaction consideration represents
an approximate 36% premium over the closing share price of Isle of
Capri on September 16, 2016.
Following the completion of the transaction, Eldorado will benefit from increased
operational and geographic diversity as it will add thirteen
casino–resorts to its portfolio, for a total of 20 properties in
ten states. After giving effect to the completion of the
transaction and the sale of Isle of Capri Casino Hotel Lake
Charles, the combined operations of Eldorado and Isle would have generated
approximately $1.8 billion in revenue
for the twelve months ended June 30,
2016. Eldorado's expanded property portfolio will
feature approximately 20,800 slot machines and VLTs, more than 560
table games and over 6,500 hotel rooms. No single market
accounted for more than 15% of the combined entity's Adjusted
EBITDA for the twelve month periods ended the last day of the most
recent fiscal quarter for each of Eldorado and Isle.
Gary Carano, Chairman and Chief
Executive Officer of Eldorado,
commented, "The acquisition of Isle of Capri represents a
transformational growth opportunity for Eldorado and is a significant milestone in the
successful ongoing execution of our long-term strategy to
opportunistically expand our regional gaming platform through
accretive acquisitions. In the last two years we have created
tremendous value for our shareholders as the scale of Eldorado
Resorts will grow from two wholly-owned properties and a 50%
interest in a third property in two markets in 2014 to 20
properties in ten states after completing the transaction.
Financially, the transaction is expected to be accretive to our
operating results upon closing. For the twelve month periods
ended the last day of the most recent fiscal quarter for each of
Eldorado and Isle, the revenues of
the combined company were almost double Eldorado's revenues on a standalone basis and
combined Adjusted EBITDA was approximately $400 million, inclusive of the cost synergies we
have identified. Strategically, the combination builds the
scale of our gaming operations and further diversifies the
geographic reach of our operations without any overlap with our
existing properties.
"We intend to implement our strategy of focusing on margin
enhancement and customer service and experiences across the
portfolio by marrying best practices from both companies. Led
by our proven gaming, hotel management and food and beverage teams
with a long-term record of operating execution and M&A
integration we believe that Eldorado Resorts will be positioned for
long-term success. Combining the assets, management,
personnel, operations and other resources of these two
organizations is expected to create substantial near- and long-term
synergies."
Eric Hausler, Chief Executive
Officer of Isle of Capri, added, "We are pleased to reach this
agreement with Eldorado Resorts, which provides Isle of Capri
shareholders with substantial and immediate value, as well as the
opportunity to participate in the upside potential of the combined
company. The premium value our shareholders will be receiving
reflects the culmination of several years of hard work by many
dedicated Isle of Capri employees and the determination and
guidance of our Board of Directors in creating and driving value.
I am thankful for the hard work and dedication of our
talented employees, and I am confident they will continue to make
many valuable contributions as part of a larger and stronger
organization. I look forward to working closely with the
Eldorado team to bring our
companies together to realize the benefits of this compelling
combination and ensure a smooth transition."
Tom Reeg, President and Chief
Financial Officer of Eldorado,
concluded, "This acquisition marks further progress toward our goal
of strategically expanding our property base to realize benefits of
scale, increasing long-term strategic and financial flexibility,
and driving shareholder value. Our experience and success
over the last two years in integrating the MTR assets and Silver
Legacy and Circus Circus operations will serve us well as we add
the Isle of Capri assets to our operating base. With our
experienced management team, operating discipline and
return-focused approach to capital expenditures, we believe the
acquisition of Isle of Capri offers a meaningful opportunity for
Eldorado Resorts, our shareholders and Isle shareholders.
Notably, after giving effect to the transaction, the incurrence of
debt to fund the cash portion of the purchase price, transaction
expenses, and the expected first year cost synergies of
$35 million, we expect our net
leverage ratio to be approximately 5.1x at closing. We plan
to use the free cash flow expected to be generated by the combined
company to reduce leverage and pursue future growth
opportunities."
Eldorado has received committed
financing for the transaction totaling $2.1
billion from J.P. Morgan. The completion of the transaction
is not subject to a financing contingency.
The transaction has been unanimously approved by the Boards of
Directors of both Eldorado Resorts, Inc. and Isle of Capri Casinos,
Inc. The transaction is subject to approval of the
stockholders of Eldorado Resorts and Isle of Capri, the approval of
applicable gaming authorities, the expiration of the applicable
Hart-Scott-Rodino waiting period and other customary closing
conditions, and is expected to be consummated in the second quarter
of 2017. Certain stockholders of Eldorado and Isle of Capri who control
approximately 24% and 35% of the outstanding shares of common stock
of Eldorado and Isle of Capri,
respectively, have signed agreements to vote in favor of the
transaction. Upon completion of the transaction, Eldorado and Isle of Capri shareholders will
hold approximately 62% and 38%, respectively, of the combined
company's outstanding shares. In addition, subject to mutual
agreement by both companies, two members of the Isle of Capri Board
of Directors will be designated as members of the Eldorado Board of Directors effective
immediately following the closing of the transaction.
J.P. Morgan is acting as exclusive financial advisor and Milbank
Tweed Hadley & McCloy LLP is acting as legal counsel to
Eldorado in connection with the
proposed transaction. Credit Suisse is acting as exclusive
financial advisor and Mayer Brown LLP is acting as legal counsel to
Isle of Capri in connection with the proposed transaction.
Conference Call, Webcast, Investor
Presentation
Eldorado Resorts and Isle of Capri will host a
joint conference call today, Monday,
September 19 at 8:30 a.m. ET
to review the transaction and host a question and answer
session. To access the conference call, interested parties
may dial (888) 461-2011 (domestic callers) or (719) 457-2659
(international callers). The Conference ID Number is 8991337.
Participants can also listen to a live webcast of the call from
Eldorado's website at
http://www.eldoradoresorts.com/ or Isle of Capri's website at
http://www.islecorp.com/index.html. During the conference
call and webcast, management will review a presentation summarizing
the proposed transaction which can be accessed at
http://www.eldoradoresorts.com/. A webcast replay will be
available for 90 days following the live event at
http://www.eldoradoresorts.com/. Please call five minutes in
advance to ensure that you are connected. Questions and
answers will be taken only from participants on the conference
call. For the webcast, please allow 15 minutes to register,
download and install any necessary software.
About Eldorado Resorts, Inc.
Eldorado Resorts is a
casino entertainment company that owns and operates seven
properties in five states, including the Eldorado Resort Casino,
the Silver Legacy Resort Casino and Circus Circus Resort Casino in
Reno, NV; the Eldorado Resort
Casino in Shreveport, LA; Scioto
Downs Racino in Columbus, OH;
Mountaineer Casino Racetrack & Resort in Chester, WV; and Presque Isle Downs &
Casino in Erie, PA. For more
information, please visit www.eldoradoresorts.com.
About Isle of Capri Casinos, Inc.
Isle of Capri
Casinos, Inc. is a leading regional gaming and entertainment
company dedicated to providing guests with an exceptional
experience at each of the 14 casino properties that it owns or
operates, primarily under the Isle and Lady Luck brands. The
Company currently operates gaming and entertainment facilities in
Colorado, Florida, Iowa, Louisiana, Mississippi, Missouri, and Pennsylvania. More information is available at
the Company's website, www.islecorp.com.
Important Information for Investors and Stockholders
The information in this press release is not a substitute for the
prospectus/proxy statement that Eldorado and Isle will file with the
Securities and Exchange Commission (the "SEC"), which will include
a prospectus with respect to shares of Eldorado common stock to be
issued in the merger and a proxy statement of each of Eldorado and Isle in connection with the
merger between Eldorado and Isle
(the "Prospectus/Proxy Statement"). The Prospectus/Proxy Statement
will be sent or given to the stockholders of Eldorado and Isle when it becomes available
and will contain important information about the merger and related
matters, including detailed risk factors. SECURITY HOLDERS OF
ELDORADO AND ISLE ARE ADVISED TO
READ THE PROSPECTUS/PROXY STATEMENT CAREFULLY WHEN IT BECOMES
AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED MERGER. The Prospectus/Proxy Statement and other documents
that will be filed with the SEC by Eldorado and Isle will be available without
charge at the SEC's website, www.sec.gov, or by directing a request
when such a filing is made to (1) Eldorado Resorts, Inc. by
mail at 100 West Liberty Street, Suite 1150, Reno, Nevada 89501, Attention: Investor
Relations, by telephone at (775) 328-0112 or by going to the
Investor page on Eldorado's
corporate website at www.eldoradoresorts.com; or (2) Isle of
Capri Casinos, Inc. by mail at 600 Emerson Road, Suite 300,
Saint Louis, Missouri 63141,
Attention: Investor Relations, by telephone at (314) 813-9200, or
by going to the Investors page on Isle's corporate website at
www.islecorp.com. A final proxy statement or proxy/prospectus
statement will be mailed to stockholders of Eldorado and Isle as of their respective
record dates.
The information in this press release is neither an offer to
sell nor the solicitation of an offer to sell, subscribe for or buy
any securities, nor shall there be any sale, issuance or transfer
of securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to registration or qualification
under the securities laws of such jurisdiction. This communication
is also not a solicitation of any vote in any jurisdiction pursuant
to the proposed transactions or otherwise. No offer of securities
or solicitation will be made except by means of a prospectus
meeting the requirements of Section 10 of the Securities Act
of 1933, as amended.
Proxy Solicitation
Eldorado and Isle, and certain of their
respective directors, executive officers and other members of
management and employees may be deemed participants in the
solicitation of proxies in connection with the proposed
transactions. Information about the directors and executive
officers of Eldorado is set forth
in the proxy statement for Eldorado's 2016 annual meeting of stockholders
and Eldorado's 10-K for the year
ended December 31, 2015. Information about the directors and
executive officers of Isle is set forth in the proxy statement for
Isle's 2016 annual meeting of shareholders and Isle's Form 10-K for
the year ended April 24, 2016.
Investors may obtain additional information regarding the interests
of such participants in the proposed transactions by reading the
prospectus/proxy statement for such proposed transactions when it
becomes available.
Non-GAAP Measures
Adjusted EBITDA is a non-GAAP
measurement. Eldorado
defines adjusted EBITDA operating income (loss) before depreciation
and amortization, stock based compensation, (gain) loss on the sale
or disposal of property, equity in income of unconsolidated
affiliate, acquisition charges, S-1 expenses, severance expenses
and other regulatory gaming assessments, including the impact of
change in reporting requirements.
Isle defines Adjusted EBITDA as earnings from continuing
operations before interest and other non-operating income
(expense), income taxes, stock-based compensation, preopening
expenses and depreciation and amortization.
Combined Adjusted EBITDA is based on the combination of
Eldorado's Adjusted EBITDA and
Isle's Adjusted EBITDA for the relevant periods.
Forward-Looking Statements
This press release
contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements are based on the current expectations of
Eldorado and Isle and are subject
to uncertainty and changes in circumstances. These forward-looking
statements include, among others, statements regarding the expected
synergies and benefits of a potential combination of Eldorado and Isle, including the expected
accretive effect of the merger on Eldorado's results of operations; the
anticipated benefits of geographic diversity that would result from
the merger and the expected results of Isle's gaming properties;
expectations about future business plans, prospective performance
and opportunities; required regulatory approvals; the expected
timing of the completion of the transaction; and the anticipated
financing of the transaction. These forward-looking statements may
be identified by the use of words such as "expect," "anticipate,"
"believe," "estimate," "potential," "should," "will" or similar
words intended to identify information that is not historical in
nature. The inclusion of such statements should not be regarded as
a representation that such plans, estimates or expectations will be
achieved. There is no assurance that the potential transaction will
be consummated, and there are a number of risks and uncertainties
that could cause actual results to differ materially from the
forward-looking statements made herein. These risks and
uncertainties include (a) the timing to consummate a potential
transaction between Eldorado and
Isle; (b) the ability and timing 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; (c) the ability to obtain the approval of
stockholders of Eldorado and Isle; (d) the possibility that
the merger does not close when expected or at all or that the
companies may be required to modify aspects of the merger to
achieve regulatory approval; (e) Eldorado's ability to realize
the synergies contemplated by a potential transaction;
(f) Eldorado's ability to promptly and effectively integrate
the business of Eldorado and Isle; (g) uncertainties in the
global economy and credit markets and its potential impact on
Eldorado's ability to finance the transaction; (h) the outcome
of any legal proceedings that may be instituted in connection with
the transaction; (i) the ability to retain certain key
employees of Isle; (j) the possibility of a material adverse
change affecting Eldorado or Isle; (k) the possibility that the
business of Eldorado or Isle may suffer as a result of the
announcement of the transaction; (l) Eldorado's ability to
obtain financing on the terms expected, or at all; (m) changes in
value of Eldorado's common stock between the date of the merger
agreement and the closing of the merger; and (n) the risk
factors disclosed in Eldorado's most recent Annual Report on Form
10-K, which Eldorado filed with the SEC on March 15, 2016 and the
risk factors disclosed in Isle's most recent Annual Report on Form
10-K, which Isle filed with the SEC on June 21, 2016, and in all
reports on Forms 10-K, 10-Q and 8-K filed with the Securities and
Exchange Commission by Eldorado and Isle subsequent to the filing
of their respective Form 10-K's. Forward-looking statements reflect
the analysis of management of Eldorado and Isle as of the date of
this release. Eldorado and Isle do not undertake to revise these
statements to reflect subsequent developments, except as required
under the federal securities laws. Readers are cautioned not to
place undue reliance on any of these forward-looking
statements.
Eldorado Resorts
Contacts:
|
|
Thomas
Reeg
|
Joseph N. Jaffoni,
Richard Land
|
President and Chief
Financial Officer
|
JCIR
|
Eldorado Resorts,
Inc.
|
(212)
835-8500
|
(775)
328-0112
|
eri@jcir.com
|
investorrelations@eldoradoresorts.com
|
|
|
|
Isle of Capri
Contacts:
|
|
Eric
Hausler
|
Jill
Alexander
|
Chief Executive
Officer
|
Senior Director of
Corporate Communication
|
(314)
813-9205
|
(314)
813-9368
|
|
|
www.islecorp.com
|
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SOURCE Isle of Capri Casinos, Inc.