Updated July 20, 2020 - 5:06 pm
Though it took more than a year to close the deal, Eldorado Resort Inc.’s $17.3 billion acquisition of Caesars Entertainment Corp. is finally done, triggering a new flurry of layoffs.
Most of the jobs executives had at Caesars gave way to their Eldorado counterparts at the close, the company’s chief operating officer said Monday.
“We’ve gone through unprecedented times over the last few months, but we remained enthused and optimistic about the possibility of this transaction and about the potential of the new company and we’ve never wavered in our determination to get to the finish line,” said Anthony Carano, whose Reno-based family has formed the nation’s largest casino company by closing on the deal.
The newly formed company will be called Caesars Entertainment, Inc. and the public company stock will be traded using the CZR ticker symbol on the Nasdaq exchange starting Tuesday.
The new Caesars also will keep many of the traditional Caesars brands and use them as needed across the country, where it will operate 52 properties in 16 states. The company also owns resorts in foreign countries, some with casinos. Caesars-branded properties operate in Canada, Egypt, South Africa, Great Britain and Dubai.
According to filings with the Securities and Exchange Commission, Eldorado had 15,500 employees as of the end of 2019, while Caesars had 64,000.
In April Caesars announced it would furlough roughly 90 percent of its employees at domestic-owned properties, as well as corporate staff.
“The hardest part in getting to the finish line was definitely having to furlough about 90 to 95 percent of our workforce in April of this year,” Carano said. “That was a terrible day for both companies, but I’m very excited about how the business is coming back and how we are able to bring back our teams in a safe manner. I’m looking forward to opening Bally’s this Thursday and bringing more team members back to work. ”
The combined company is expected to cut even more staff, gaming industry watchers say.
“The new Caesars’ focus will be at the property level and tighten up the corporate structure,” said Brendan Bussmann, director of government affairs for Global Market Advisors LLC. “As with any merger, integrating two teams is one that takes planning and making sure you not only have the best and the brightest but putting forward the best team on the field that will deliver for Caesars.”
SunTrust Robinson Humphrey gaming analyst Barry Jonas said he also expects to see headcount reductions take place on the Caesars corporate side, “given its centralized focus.”
“That said, there have been meaningful cuts and hiring freezes at Caesars since the deal was originally announced last year, with (CEO) Tony Rodio essentially getting a head start on some of the synergies (Eldorado) outlined,” he said.
Bussmann doesn’t expect to see any immediate changes at the property level due to the merger, but said layoffs based on current market demand and the economy would be more likely.
“In our current environment, layoffs and staffing challenges are nothing new as we re-emerge from The Great Shutdown,” he said. “It’s a challenging time for every operator as they navigate through evolving consumer demand and fluid pandemic orders, let alone merging two companies together in the middle of it all.”
Carano said Eldorado’s decentralization philosophy will place more decision-making in the hands of the local operators and a greater emphasis on customer service at each property.
‘A family-run business’
“We are a family-run business,” Carano said, adding his grandfather founded the company in 1972.
“We take a family approach to the entire business,” he said. “It kind of goes back to an approach from prior Vegas where the level of importance placed on each customer and personalized service is very important to our company.”
One of the first areas of integration will be placing the company’s Caesars Rewards loyalty club in every Eldorado casino.
“Caesars has an incredible program with Caesars Rewards — the best rewards program in all of gaming,” Carano said. “We bring around 12 million more players to the database so there’s 60 million to 65 million people to show off these incredible Nevada properties.”
In addition to Caesars Palace, Eldorado will own Harrah’s Las Vegas, The Linq Hotel, Flamingo, Cromwell, Bally’s, Paris-Las Vegas, Planet Hollywood and the off-Strip Rio.
The company also has the brand-new Caesars Forum convention center that was on the verge of opening when the COVID-19 pandemic hit and the meetings and convention industry shut down.
The High Roller observation wheel is also a part of the portfolio and three large retail centers — The Linq Promenade, the Miracle Mile Shops at Planet Hollywood and The Forum Shops at Caesars — are attached to company assets.
Strip asset to be sold
One of those Strip assets is likely to be sold. Carano gave no clues as to which one it would be.
“There certainly have been buyers expressing interest,” he said. “We want to get to know the teams at each property and determine which property we’ll sell at a later time.”
The deal was announced over a year ago in June, and required approval from shareholders, the Federal Trade Commission and regulatory bodies from the 16 states in which the merged company will operate.
But right now, it’s about the integration of company cultures.
“Most important to us is integrating the two cultures quickly, bringing that family-run approach to the Caesars properties,” he said. “We look forward to getting around to all our properties and get to know everybody.”
On Eldorado’s last day of trading on the Nasdaq exchange, shares closed up 24 cents, 0.6 percent, in trading nearly twice the average daily volume. After hours, it lost 4 cents, 0.1 percent to end at $38.20 a share.
The last day for Caesars trading, stock was off 5 cents, 0.4 percent, in heavy trading. After hours, it squeaked up 2 cents, 0.2 percent, to end at $12.39 a share.
Tuesday, Eldorado, now known as Caesars Entertainment, will take possession of the CZR ticker symbol.