Billionaire investor Carl Icahn has agreed to sell Tropicana Entertainment's hotel real estate and operations in a deal valued at $1.85 billion.
The Belle of Baton Rouge, a casino in the heart of that city's downtown area, will be sold as owner Tropicana Entertainment offloads casino properties in a $1.85 billion deal, The Advocate reports.
"We identified this undervalued asset as being a flawless situation to deploy our modus operandi, by which we seek to acquire undervalued assets, nurture, guide and improve their condition and operations, and to ultimately greatly enhance value for all shareholders", Icahn said. "By hiring a great CEO in Tony Rodio and a great management team, and by reinvesting every single penny of profits back into the company, we turned Tropicana into a great casino company".
The $1.85 million deal also included the sale of Tropicana Real Estate, including the Atlantic City property, to Gaming and Leisure Properties Incorporated.
Two other casinos under the Tropicana brand, the MontBleu Casino Resort & Spa in South Lake Tahoe and the Tropicana Aruba Resort and Casino, will be sold separately at Eldorado's request.
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These properties include approximately 7,900 slot machines, 265 table games and 5,400 hotel rooms plus dining, retail and entertainment amenities. This tremendous financial turnaround would not have been possible without it.
The Illinois transaction is expected to close in the fourth quarter of 2018, subject to regulatory approvals and other customary closing conditions and is subject to a customary working capital adjustment. The company said the "Tropicana portfolio is in good shape and we have no immediate significant capex plans acquired properties". The purchase also doesn't include the Tropicana property in Aruba.
Gary Carano, Chairman and Chief Executive Officer of Eldorado, commented, "With our proposed acquisition of Tropicana Entertainment, Eldorado Resorts is yet again pursuing a large transaction that is expected to be accretive, further increase the scale of our regional gaming platform and drive free cash flow growth". That casino recently became the No. 2 casino in Atlantic City in terms of gambling revenue, trailing only the Borgata. Gambling has been legal in Atlantic City, one of the few such cities in the United States, since the first casino opened in 1978.
Eldorado's share prices jumped 21 percent today after announcing the deal, as well as the $327 million cash purchase of the Grand Victoria Casino in Elgin, Illinois.
Additionally, Icahn past year sold the Trump Taj Mahal in Atlantic City to Hard Rock International, which is redeveloping the site as the Hard Rock Hotel & Casino Atlantic City.