We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The casino industry has not seen many merger and acquisition (M&A) deals of late, apart from a few sporadic transactions.
Notably, big casino companies like Las Vegas Sands Corp. (LVS - Free Report) and Wynn Resorts Ltd. (WYNN - Free Report) have been refraining from investing in small properties and focusing on large resorts. These companies are also staying away from venturing into small cities as it will not add much to their bottom line.
However, by merging operations, the regional players in the casino space could opportunistically expand their regional gaming platform and recognize benefits of scale, ever-increasing long-term strategic and financial flexibility, and drive shareholders’ value.
Recently, Eldorado Resorts, Inc. reached an agreement to buy regional gaming operator Isle of Capri Casinos, Inc. . This has raised possibilities of a consolidation wave hitting the regional players in the casino industry.
The total value of the deal between Eldorado and Isle of Capri stands at $1.7 billion, including the latter’s long-term debt of $929 million.
Following the development, Isle of Capri shares rallied over 30% in yesterday’s trading session. Notably, Eldorado will pay $23 in cash for each share of Isle of Capri or 1.638 shares of Eldorado common stock, which is at a premium of approximately 36% to Isle of Capri’s closing price as on Sep 16, 2016.
The deal is expected to close in the first quarter of 2017. Upon completion, Isle of Capri shareholders will own about 38% of the combined entity’s outstanding shares. Meanwhile, the combination of Eldorado and Isle of Capri is likely to create a regional player with 20 casino-resorts across 10 states.
Bottom Line
The bringing together of assets, management, personnel and other resources of the two organizations helps in creating sizeable near- and long-term synergies by expanding the scale and diversifying the reach of operations.
Thus, given the benefits, we might see a flurry of merger deals among the regional players in the casino space, going forward.
Where Do Zacks' Investment Ideas Come From?
You are welcome to download the full, up-to-the-minute list of 220 Zacks Rank #1 ""Strong Buy"" stocks free of charge. There is no better place to start your own stock search. Plus you can access the full list of must-avoid Zacks Rank #5 ""Strong Sells"" and other private research. See the stocks free >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
The M&A Wave Might Hit Casino Stocks: Here's Why
The casino industry has not seen many merger and acquisition (M&A) deals of late, apart from a few sporadic transactions.
Notably, big casino companies like Las Vegas Sands Corp. (LVS - Free Report) and Wynn Resorts Ltd. (WYNN - Free Report) have been refraining from investing in small properties and focusing on large resorts. These companies are also staying away from venturing into small cities as it will not add much to their bottom line.
However, by merging operations, the regional players in the casino space could opportunistically expand their regional gaming platform and recognize benefits of scale, ever-increasing long-term strategic and financial flexibility, and drive shareholders’ value.
Recently, Eldorado Resorts, Inc. reached an agreement to buy regional gaming operator Isle of Capri Casinos, Inc. . This has raised possibilities of a consolidation wave hitting the regional players in the casino industry.
GAMING Industry Price Index
GAMING Industry Price Index
Deal Details
The total value of the deal between Eldorado and Isle of Capri stands at $1.7 billion, including the latter’s long-term debt of $929 million.
Following the development, Isle of Capri shares rallied over 30% in yesterday’s trading session. Notably, Eldorado will pay $23 in cash for each share of Isle of Capri or 1.638 shares of Eldorado common stock, which is at a premium of approximately 36% to Isle of Capri’s closing price as on Sep 16, 2016.
The deal is expected to close in the first quarter of 2017. Upon completion, Isle of Capri shareholders will own about 38% of the combined entity’s outstanding shares. Meanwhile, the combination of Eldorado and Isle of Capri is likely to create a regional player with 20 casino-resorts across 10 states.
Bottom Line
The bringing together of assets, management, personnel and other resources of the two organizations helps in creating sizeable near- and long-term synergies by expanding the scale and diversifying the reach of operations.
Boyd Gaming Corporation (BYD - Free Report) , Red Rock Resorts, Inc. (RRR - Free Report) , Monarch Casino & Resort Inc. (MCRI - Free Report) and Golden Entertainment, Inc. (GDEN - Free Report) are some of the other popular regional players in the casino space. Notably, all these four stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Thus, given the benefits, we might see a flurry of merger deals among the regional players in the casino space, going forward.
Where Do Zacks' Investment Ideas Come From?
You are welcome to download the full, up-to-the-minute list of 220 Zacks Rank #1 ""Strong Buy"" stocks free of charge. There is no better place to start your own stock search. Plus you can access the full list of must-avoid Zacks Rank #5 ""Strong Sells"" and other private research. See the stocks free >>