Eight years after salvaging the company from bankruptcy, billionaire investor Carl Ichan is cashing out of the Tropicana Entertainment casino empire.
In a press release issued on April 16, Ichan Enterprises announced that Tropicana Entertainment Inc. will sell the real estate for seven of its eight casino properties to a second Ichan company, known as Gaming and Leisure Properties, for $1.21 billion. In turn, Gaming and Leisure Properties will lease the venues to Reno-based Eldorado Resorts, which will also fund $640 million of cash considerations payable.
Ichan completed his acquisition of the Tropicana Entertainment group in 2010, paying just $200 million in cancelled debt obligations to take over the bankrupt casino chain.
Eldorado Resorts is the owner and operator of 19 casinos across the U.S., including Circus Reno, and the Isle of Capri and Lady Luck chains.
The company will absorb the following Tropicana Entertainment properties as part of the deal:
Belle of Baton Rouge (Louisiana)
Lumière Place (St. Louis, Missouri)
MontBleu Resort Casino & Spa (Stateline, Nevada)
Trop Casino Greenville (Mississippi)
Tropicana Atlantic City (New Jersey)
Tropicana Evansville (Indiana)
Tropicana Laughlin (Nevada)
An eighth Tropicana Entertainment casino in Aruba will be sold off separately, after Eldorado Resorts deemed the property unworthy of further investment.
Tropicana Entertainment’s former flagship casino on the Las Vegas Strip will not be included, as it was acquired by Penn National Gaming in 2015.
In a prepared statement, Ichan praised the management team he put in place for their effectiveness in reviving the Tropicana brand:
“Icahn Enterprises first acquired an interest in Tropicana in 2008. Tropicana was bankrupt and desperately needed new leadership.
At that time, we identified this undervalued asset as being a perfect 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.
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 that today owns seven casinos.”
Rodio followed up by recognizing the many contributors to Tropicana Entertainment’s rebound:
“I am incredibly proud of what the entire Tropicana team has been able to accomplish over the past 8 years, taking Tropicana from bankruptcy to one of the industry’s true success stories.
Through their commitment and investment, Tropicana was able to create hundreds of construction jobs and employs thousands more employees today than it employed in 2010.
I would also like to thank the thousands of Tropicana team members whose hard work, dedication, and commitment to excellence also played a huge part in our accomplishment.”
Gary Carano, who serves as chairman and chief executive officer for Eldorado Resorts, commented on the company’s expansion in a press release:
“The acquisition of seven Tropicana Entertainment properties will allow Eldorado to enter two new gaming jurisdictions and deliver additional financial and geographic diversity to our operating base.
We have identified $40 million of synergies that we expect to realize in the first year of our ownership.”
All told, the deal – which is expected to close in the second half of this year – transfers 7,900 slot machines, 265 table games and nearly 5,400 hotel rooms to Eldorado Resorts’ ownership. That increases the company’s inventory to 26,800 slot machines, over 800 table games, and more than 12,500 hotel rooms.
News of the deal sent shares of Eldorado Resorts stock soaring on Monday, climbing 16 percent to close at $41.50.