Eldorado will acquire Tropicana Entertainment Inc. and Grand Victoria Casino
Milbank LLP advised leading casino entertainment company Eldorado Resorts, Inc. (NASDAQ: ERI) in its proposed acquisition of Tropicana Entertainment Inc. in a transaction valued at $1.85 billion and its proposed $327.5 million acquisition of Grand Victoria Casino, both announced on April 16. Milbank previously advised Eldorado on its proposed sale of Presque Isle Downs & Casino and Lady Luck Casino Vicksburg, as well as on its acquisition of Isle of Capri Casinos, Inc.
The agreements with Tropicana provide that Eldorado will fund $640 million of cash consideration and that the remaining consideration will be funded through the purchase of substantially all of Tropicana’s real estate, excluding the MontBleu Casino Resort & Spa in South Lake Tahoe and the Tropicana Aruba Resort and Casino, by Gaming and Leisure Properties (NASDAQ:GLPI) for $1.21 billion. Following the consummation of the transaction Tropicana will be a wholly-owned subsidiary of Eldorado and will lease the properties acquired by GLPI pursuant to a master lease with an initial term of 15 years, with renewals of up to 20 years at the Eldorado’s option. The master lease is expected to have an initial annual rent of approximately $110 million. Eldorado obtained $600 million of committed debt financing from J.P. Morgan to fund a portion of the purchase price for the acquisition.
Eldorado also entered into a definitive agreement to acquire the Grand Victoria Casino in Elgin, Illinois for $327.5 million in cash. Eldorado will fund the acquisition of the Grand Victoria with cash from previously announced asset sales, cash from ongoing operations and borrowings under its revolving credit facility.
The Milbank team was led by Los Angeles Corporate partner Deborah Conrad with New York Tax partners Russell Kestenbaum and Max Goodman; New York Real Estate partner Kevin O’Shea; New York Executive Compensation and Employee Benefits partner Joel Krasnow; New York Real Estate special counsel Alan Schacter and associates Mark Castiglia, Chris West, Natalie Chitayat, Raad Shaw and Kelly Bartley.
Both transactions are expected to close by the end of 2018, subject to receipt of required regulatory approvals and satisfaction of other customary closing conditions.
