Casino operators MTR Gaming Group Inc. and privately held Eldorado Resorts LLC said Monday that they have agreed to merge in an all-stock deal.
Under the terms of the deal, current MTR Gaming shareholders will be given a cash election option of $5.15 per share for up to 5.8 million shares. The remaining shares will be exchanged for shares in the new company.
The owners of Eldorado will be issued 35.6 million shares, or approximately 55 percent of the total shares, in the new company. The new combined company's shares will be valued at $5.15 per share. That's a 44 percent increase over MTR Gaming's closing stock price on Friday.
The combined company will be called Eldorado Resorts Inc. and will remain publicly traded.
The deal is expected to close in the middle of 2014 and is subject to regulatory and shareholder approval.
Gary Carano will be named the CEO of the new company. Carano is currently president of Eldorado Resorts LLC. "We are excited to announce this transformative transaction, which creates a new gaming platform with a diversified portfolio across the country," Carano said in a statement.
The combined company will operate six properties and have a total of 9,968 slot machines and video lottery terminals, 283 table games and 3,282 hotel rooms.
MTR Gaming owns and operates Mountaineer Casino Racetrack and Resort in Chester, W. Va.; Presque Isle Downs & Casino in Erie, Pa.; and Scioto Downs in Columbus, Ohio. Eldorado Resorts owns and operates the Eldorado Reno in Reno, Nev.; Eldorado Shreveport in Shreveport, La.; and Silver Legacy in Reno, Nev., which is a joint venture with MGM Resorts International.
Separately, MTR Gaming also said Monday that it naming Joseph Billhimer as president and chief operating officer of MTR Gaming. Billhimer has worked at the company since 2011, and worked at several casino companies in his career.
Shares of MTR Gaming jumped 60 cents, or 16.7 percent, to $4.17 in afternoon trading Monday.