CZR, CACQ Caesar's Entertainment, Caesars Acquisition agree to merge
Caesars (CZR) and Caesars Acquisition(CACQ) announced that they have entered into a definitive agreement to merge in an all-stock transaction. Upon completion of the merger and the proposed restructuring of Caesars Entertainment Operating Company, the merged company will be well capitalized and positioned for sustainable long-term growth and value creation. Upon the completion of the transaction, Caesars Entertainment will own a collection of high-growth assets, including properties in destination markets and a majority stake in Caesars Interactive Entertainment, and will operate a valuable network of domestic and international resorts and casinos. The planned merger of Caesars Entertainment and Caesars Acquisition will also support the proposed restructuring of CEOC, a subsidiary of Caesars Entertainment. CEOC announced on December 19, 2014, that it and Caesars Entertainment had reached an agreement with CEOC's first lien noteholder steering committee regarding the terms of a comprehensive financial restructuring plan that will substantially reduce debt and lower interest payments. On a pro-forma basis, the merged company will have a combined market capitalization of $3.2B, based on closing prices on December 19, 2014. The merged company will have a combined cash balance of $1.7B. As of September 30, 2014, Caesars Growth Partners had approximately $1B of cash and net leverage of 3.2x. Pro forma for the merger and the proposed restructuring of CEOC, all Caesars-owned entities will be reasonably leveraged and produce positive free cash flow. The merged company will produce positive free cash flow on a consolidated basis. The merged company will continue to be controlled by affiliates of Apollo Global Management and TPG Capital. Gary Loveman will be Chairman and CEO of the combined company and has agreed to a new employment agreement that extends his tenure until the end of 2016. Loveman will oversee the restructuring of CEOC and continue to focus on recruiting senior talent to Caesars. Mitch Garber, CEO of Caesars Acquisition, will be CEO of CIE. Following the merger, Garber will join the Board of Directors of Caesars Entertainment as Vice Chairman and will assume an expanded leadership role on a project-specific basis across the Company. The merged company will conduct business as Caesars Entertainment and continue to trade on the NASDAQ under the ticker CZR. :theflyonthewall.com
