(ERI) announced a definitive agreement to acquire Tropicana Entertainment Inc.in a cash transaction that is valued at $1.85 billion.
Gaming and Leisure Properties, a company that owns 37 casinos in the US, will add to its portfolio by acquiring almost all of Tropicana Entertainment's real estate, except the MontBleu and the Tropicana Aruba, for $1.21 billion. Mr. Icahn has chaired Tropicana's board since 2010.
"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. The company revamped Tropicana's management team, hiring Tony Rodio as chief executive, and reinvested "every single penny" of profits back into the company, Mr. Icahn said in prepared remarks.
The company reached a deal to sell Tropicana's real estate to Gaming and Leisure Properties Inc.
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. The property features 1,088 slot machines, 30 table games, a 12-table poker room and four dining options, including Prime BurgerHouse, the award-winning Buckinghams Steakhouse & Lounge, the Indulge Show Kitchen Buffet and the 24-hour Crave Deli. This tremendous financial turnaround would not have been possible without it. The other properties are in Indiana, Louisiana, Mississippi, Missouri, and New Jersey.More news: Now Canada Pulls Embassy Staff Out of Cuba
The deal is expected to close in the second half of 2018 and does not include any financing conditions, Icahn Enterprises said. The purchase also doesn't include the Tropicana property in Aruba.
Eldorado said the Tropicana properties are in excellent shape, and does not anticipate needing to invest significant money into them.
Eldorado will enter a master lease agreement with Gaming and Leisure Properties, initially paying rent of $110 million to operate the acquired hotel-casinos in the first year.
Earlier it announced that it would also acquire the Grand Victoria Casino in Elgin, Illinois for $327.5 million in cash.
In Atlantic City, Icahn still owns the shuttered former Trump Plaza Hotel and Casino, which shut down in 2014.