Eldorado Resorts to buy Isle of Capri Casinos

Four years after opening its doors, Isle Casino Cape Girardeau, along with all other Isle of Capri Casinos Inc. properties, soon will have a new owner: Eldorado Resorts Inc.

On Monday morning, both companies announced a merger agreement wherein Eldorado will acquire all outstanding shares of Isle of Capri. Isle of Capri will receive 1.638 shares of Eldorado common stock, or $23 per share.

The deal will cost Eldorado $1.7 billion and includes $929 million of long-term debt from Isle of Capri and its subsidiaries.

Though Isle Casino will have a new parent company, officials suggest little else will change in the months leading up to the acquisition or after the deal is final. And city officials expect little change as far as tax revenue is concerned.

“While the transaction is newly announced and specifics of the transition are being formulated as we speak, it is business as usual at Isle Casino Cape Girardeau,” said Jill Alexander, senior director of corporate communication for Isle of Capri Casinos Inc.

At the news conference announcing the acquisition, Tom Reeg, president and chief financial officer of Eldorado Resorts, said by acquiring Isle of Capri, his company is adding many strong properties to its portfolio.

Eldorado Resorts has no immediate intentions to rebrand the Isle of Capri casinos after they are acquired.

“The expectation is that the Isle brand will remain, certainly,” Reeg said.

There are individual assets the company may consider rebranding down the line, but he said “if we’re making a rebranding decision, it’s because we’re adding something that makes it a logical decision, not because there is anything wrong with the Isle brand.”

Eric Hausler, CEO of Isle of Capri, said the merger would create a company large enough to provide more advancement opportunities for employees.

“I am thankful for the hard work of our employees, and I am confident that they will continue to make many valuable contributions as part of a larger, stronger organization,” Hausler said at the news conference.

The ownership change will not affect the $3.2 million the city of Cape Girardeau receives annually in casino tax revenue, according to city finance director John Richbourg.

Nor will it affect the money the city receives from Isle of Capri under a development agreement, city attorney Eric Cunningham said.

Isle of Capri pays 0.3 percent of its gross gaming revenue into a city fund for improvements and economic development for the downtown and riverfront area. The city is required to provide matching funds under the agreement.

According to Cunningham, the development agreement stipulates if ownership of the casino changes hands, the transferee would assume the obligations laid out in the agreement.

According to the 2017 fiscal year budget, the city expects to receive $190,000 from the Isle of Capri for the current fiscal year, which runs through June 30, 2017.

Eldorado is expected to take ownership of Isle of Capri in the second quarter of 2017. The acquisition will more than double Eldorado’s portfolio and improve its geographic diversity for a total of 20 properties in 10 states.

bbrown@semissourian.com

(573) 388-3630

Pertinent address:

777 Main St, Cape Girardeau, MO 63701