Eldorado to buy Tropicana Entertainment properties for $1.85 billion cash
Billionaire casino owner Carl Icahn just made investors – and himself – extremely happy. The wealthy entrepreneur and hedge fund manager inked a deal to sell Tropicana Entertainment to Eldorado Resorts Inc. for a tidy sum of $1.85 billion in cash. Tropicana was the owner of eight casinos and resorts scattered throughout the country and on the Caribbean island of Aruba.
Eldorado will take over six of the eight casinos, all located in the US, through a little bit of fancy shuffling. They will be sold to Gaming and Leisure Properties (GLPI), a real estate investment firm, who will then lease the properties back to Eldorado. GLPI will pay $1.21 billion and Eldorado will pay $640 million. The lease agreement will be valid for an initial period of 15 years.
The Aruba properties, according to the sales agreement, will be disposed of as a condition of closing. The sales agreement further stipulates that the initial $1.85 billion price tag could be increased by the amount of the net proceeds received from the sale of the Aruba properties, and would also be adjusted to pay corporate taxes.
The Tropicana properties are located in Indiana, Louisiana, Mississippi, New Jersey, Nevada and Missouri. Tropicana’s Lumiere Place in St. Louis, MO was the only casino in the area not already owned by GLPI. With the latest agreement, GLPI now becomes a predominant casino investment company in the US.