Categories Earnings, Other Industries

Carl Icahn signs massive deal to sell Tropicana Entertainment

Icahn Enterprises has decided to sell its casino venture Tropicana Entertainment (TPCA) to Gaming and Leisure Properties (GLPI) and Eldorado Resorts (ERI) for $1.85 billion. The billionaire investor’s firm owns a majority stake in Tropicana (84%). As part of the deal, Tropicana will be selling seven casinos out of the eight casinos it currently operates.

Gaming and Leisure Properties will be paying $1.21 billion and the rest coming from Eldorado Resorts. Also, Gaming and Leisure has decided to lease the acquired properties to Eldorado for 15 years. Aruba Resort is not part of the deal, as Tropicana plans to divest the property before the closing of GLPI deal.

Carl Icahn is known for his uncanny ability to pick up assets which are dirt cheap or commanding low valuation. He turnaround those assets and sells them at an appropriate time for a massive windfall. As is the case, Icahn bought Tropicana in 2008 which was under bankruptcy. He appointed Tony Rodio to run the operations. It’s worth noting, at the end of last year, Tropicana’s revenue was $898 million with its flagship property Tropicana Atlantic City bringing in $390 million to its kitty.

Tropicana Entertainment Sale

Expanding footprint

Eldorado currently manages 20 properties in the U.S. Post this deal, it gains seven more properties and expands its footprint to two more states. The company has been on a buying spree for past few years. Last year, the company bought a casino based in Reno for $1.1 billion, and on Monday it also gobbled up a casino based in Elgin, Illinois for $327.5 million. It seems the gambling industry is up for consolidation.

Thumbs up from the market

Subject to the approval of the boards, the Tropicana deal is expected to close by the end of 2018. It seems investors are gung-ho about the deal. After the market closed on Monday, Tropicana’s share has gained 27%, while Eldorado and GLPI’s shares have gained 16% and 4%.

Most Popular

Infographic: Nvidia (NVDA) Q4 revenue up 61%; earnings beat

Nvidia Corporation (NASDAQ: NVDA) Wednesday said its fourth-quarter revenues and profit increased in double-digits amid elevated demand. The results also topped the Street view, driving the stock higher during the

Nutanix (NTNX) Earnings: 2Q21 Key Numbers

Nutanix (NASDAQ: NTNX) reported second quarter 2021 earnings results today. Total revenue remained flat at $346.4 million compared to the same period a year ago. GAAP net loss was $287.3

Macy’s (M) expects digital channels to generate approx. $10 billion in sales by 2023

Shares of Macy’s Inc. (NYSE: M) were down 2.7% in morning trade on Wednesday. The stock has gained 37% since the beginning of the year. A day ago, the retailer

Tags

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top