Icahn Enterprises has reached a deal to sell the casino business that operates as Tropicana Entertainment. The firm owned by hedge fund billionaire Carl Icahn disclosed that a deal had been reached to dispose of its majority stake in Tropicana at a price of approximately $1.85 billion. Under the deal the real estate belonging to Tropicana will end up in the hands of Gaming and Leisure Properties while the hotel and gaming operations will be acquired by Eldorado Resorts via a master lease.
The stake in Tropicana Entertainment was acquired by Icahn Enterprises a decade ago. At the moment Tropicana Entertainment owns as well as operates eight casinos besides resorts. The seven casinos that Eldorado Resorts will acquire are located in six states with two in Nevada and one each in Indiana, Louisiana, Mississippi, Missouri and New Jersey. When Icahn acquired a stake in Tropicana Enterprises the firm was bankrupt but undervalued. According to Icahn the turnaround has been a massive success.
“By hiring a great CEO in Tony Rodio and a great management team, and by reinvesting every single penny of profits back into the company, we turned Tropicana into a great casino company,” said Icahn.
In total the properties include 5,400 hotel rooms, 265 table games and 7,900 slot machines as well as entertainment, retail and dining amenities. Once the pending transactions are completed the property portfolio of Eldorado will now consist of 12,500 hotel rooms, over 800 table games and 26,800 slot machines. According to Eldorado Resorts the Tropicana assets are in good shape and there will therefore be no need for significant investments to be made.
The move by Icahn Enterprises to divest its stake in Tropicana Entertainment comes in the wake of Carl Icahn nominating five directors to the board of SandRidge Energy as he fights to control the shale oil producer. SandRidge will hold an annual meeting later in the year and the nominations are setting up a likely showdown between Icahn and the existing board. Icahn has been involved in efforts aimed at forcing the shale oil producer to sell itself to him or other potential bidders.
According to Icahn the leadership of SandRidge lacks accountability. His war with the shale oil producer have led to the scuttling of the company’s intended acquisition of Bonanza Creek Energy. It has also resulted in the removal of the firm’s finance chief as well as the chief executive officer.