Caesars merger exchange ratio amended; CEOC gets financing commitment

By Caroline Salls

Pittsburgh, Feb. 21 – Caesars Entertainment Corp. and Caesars Acquisition Co. amended the terms of their proposed merger, according to a news release.

Under the amended agreement, Caesars Acquisition stockholders will receive 1.625 shares of Caesars Entertainment for each Caesars Acquisition share they own, subject to possible anti-dilution adjustments.

According to an 8-K filed with the Securities and Exchange Commission, the exchange ratio was calculated based on the daily volume-weighted average prices of Caesars Entertainment stock and Caesars Acquisition stock for the 20 consecutive trading days ended Feb. 14.

Closing of the merger is subject to regulatory and stockholder approval, receipt of tax opinions and other customary closing conditions.

Caesars said the amendment is an important milestone on the path to launching the new Caesars and completing Caesars Entertainment Operating Co., Inc.’s (CEOC) court-supervised restructuring process.

New financing

In a separate announcement, Caesars Entertainment, CEOC and its Chapter 11 debtor subsidiaries said CEOC has entered into committed financing agreements for proposed new senior secured credit facilities of CEOC, marking another key development in CEOC’s restructuring.

Specifically, CEOC entered into committed financing agreements for proposed new senior secured credit facilities, including up to $1,235,000,000 principal amount of a seven-year senior secured term loan facility and up to $200 million of a five-year senior secured revolving credit facility.

Credit Suisse will act as administrative agent, and Credit Suisse and Deutsche Bank Securities Inc. will act as joint lead arrangers for the senior facilities.

The proceeds from the term facility will be used to finance transactions in accordance with the CEOC debtors’ plan of reorganization, including to repay existing debt and to pay related fees and expenses.

The merger terms were negotiated by special committees of the boards of Caesars Entertainment and Caesars Acquisition.

Centerview Partners acted as the exclusive financial adviser to the special committee of Caesars Entertainment, and Reed Smith LLP acted as the committee’s legal counsel. Moelis & Co. LLC acted as the exclusive financial adviser to the special committee of Caesars Acquisition, and Skadden, Arps, Slate, Meagher & Flom LLP acted as the committee’s legal counsel.

Caesars is a Las Vegas-based casino-entertainment company that filed for bankruptcy on Jan. 15, 2015 in the U.S. Bankruptcy Court for the Northern District of Illinois. The Chapter 11 case number is 15-01145.

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