Eldorado Resorts, Inc. (NASDAQ:ERI) Files An 8-K Entry into a Material Definitive Agreement
Item1.01 Entry into a Material Definitive Agreement
Supplemental Indentures
As previously announced, on March29, 2017, Merger SubB issued
$375 million aggregate principal amount of 6% Senior Notes due
2025 (the 2025 Notes) to an indenture, dated as of March29, 2017
(the 2025 Notes Indenture), between Merger SubB and U.S. Bank
National Association, as Trustee (the Trustee). On May1, 2017, in
connection with the consummation of the Mergers (as defined
below), the Company, Merger SubB, the Trustee and certain
subsidiaries of the Company (the 2025 Notes Guarantors) entered
into a Supplemental Indenture (the 2025 Notes Supplemental
Indenture), to which (i)the Company assumed the obligations of
Merger SubB under the 2025 Notes and the 2025 Notes Indenture and
(ii)each of the 2025 Notes Guarantors agreed to become a
guarantor of the Companys obligations under the 2025 Notes and
the 2025 Notes Indenture.
On May1, 2017, in connection with the Mergers, certain
subsidiaries of Merger SubB, as guarantors (the 2023 Notes
Guarantors), the Company and the Trustee executed a Fourth
Supplemental Indenture, dated as of May1, 2017 (the 2023 Notes
Supplemental Indenture), supplementing the Indenture dated as of
July23, 2015, as supplemented by that certain First Supplemental
Indenture dated as of December16, 2015, that certain Second
Supplemental Indenture dated as of May26, 2016 and that certain
Third Supplemental Indenture dated as of March16, 2017 (the 2023
Notes Indenture), that was executed by such parties with respect
to the Companys 7% Senior Notes due 2023. to the 2023 Notes
Supplemental Indenture, each of the 2023 Notes Guarantors agreed
to become a guarantor of the Companys obligations under the 2023
Notes and the 2023 Notes Indenture.
Joinder and Assumption Agreement and Guaranty
Agreement
As previously announced, on April17, 2017, Merger SubB entered
into a Credit Agreement with JPMorgan Chase Bank, N.A., as
administrative agent (the Administrative Agent), and the lenders
party thereto (the Credit Agreement), consisting of a
$1.45billion term loan facility and a $300million revolving
credit line. On May1, 2017, in connection with the consummation
of the Mergers (i)the Company, Merger SubB and the Administrative
Agent entered into a Borrower Joinder and Assumption Agreement
(the Joinder and Assumption Agreement), to which the Company
assumed the obligations of Merger SubB under the Credit Agreement
and (ii)certain subsidiaries of the Company (the Credit Agreement
Guarantors) entered into a Guaranty Agreement (the Guaranty
Agreement), to which the Credit Agreement Guarantors agreed to
become a guarantor of the Companys obligations under the Credit
Agreement.
Registration Rights Agreement
As previously announced, on September19, 2016, the Company and
Isle entered into (i)a voting agreement (the REI Voting
Agreement) with Recreational Enterprises, Inc., a Nevada
corporation (REI) and (ii)a voting agreement (the GFIL Voting
Agreement) with GFIL Holdings, LLC, a Delaware limited liability
company (GFIL). to the REI Voting Agreement and the GFIL Voting
Agreement, the Company agreed to grant registration rights to REI
and GFIL, respectively. On May1, 2017, the Company entered into a
Registration Rights Agreement (the Registration Rights Agreement)
with REI and GFIL (collectively, the Holders) to which the
Company granted certain registration rights to the Holders with
respect to the shares of common stock, par value $0.00001, of the
Company (ERI Stock) held by the Holders (the Registrable
Securities). Under the Registration Rights Agreement, the Company
has agreed to file a shelf registration statement registering the
sale of shares by GFIL no later than 45 days following the
closing date of the Mergers and the Holders will have certain
customary demand and piggyback registration rights. The Company
has agreed to pay certain fees and expenses relating to
registering and offering the Registrable Securities in compliance
with the Companys obligations under the Registration Rights
Agreement.
The foregoing description of the 2025 Notes Supplemental
Indenture, the 2023 Notes Supplemental Indenture, the Joinder and
Assumption Agreement, the Guaranty Agreement and the Registration
Rights Agreement is not complete and is qualified in its entirety
by reference to the Notes Supplemental Indenture, the Joinder and
Assumption Agreement and the Registration Rights Agreement filed
as Exhibits4.1, 4.2, 4.3, 4.4 and 4.5 hereto, respectively, and
incorporated herein by reference.
Item2.01 Completion of Acquisition or Disposition of
Assets
On May1, 2017, to the Merger Agreement, Merger SubA merged with
and into Isle, with Isle continuing as the surviving entity (the
First Step Merger), and immediately following the First Step
Merger, Isle merged with and into Merger SubB, with Merger SubB
continuing as the surviving entity (the Second Step Merger, and
together with the First Step Merger, the Mergers).
to the Merger Agreement, as a result of the First Step Merger,
each share of common stock, par value $0.01 per share, of Isle
(Isle Stock), converted into the right to receive, at the
election of the holders of such shares of Isle Stock, subject to
adjustment and proration and reallocation as described in the
Merger Agreement, $23.00 in cash (the Cash Consideration) or
1.638shares of ERI Stock (the Stock Consideration).
Holders of 35,667,371shares of Isle Stock (including shares
tendered via notices of guaranteed delivery) elected to receive
the Stock Consideration (Stock Election Shares), holders of
6,882,190shares of Isle Stock (including shares tendered via
notices of guaranteed delivery) elected to receive the Cash
Consideration (Cash Election Shares), and holders of the
remaining shares of Isle Stock did not make any election (No
Election Shares). As a result and in accordance with the
adjustment, proration and reallocation procedures described in
the Merger Agreement, (x)each holder of Cash Election Shares and
No Election Shares will receive Cash Consideration in respect of
such Cash Election Shares and No Election Shares and (y)each
holder of Stock Election Shares will receive Stock Consideration
in respect of a portion of the Stock Election Shares held by such
holder and Cash Consideration in respect of the remaining portion
of the Stock Election Shares held by such holder (such portions
to be finally determined upon expiration of the period for
delivery of shares tendered via notices of guaranteed delivery).
Each Isle stock option, whether vested or unvested, that was
outstanding (or deemed outstanding) immediately prior to the
effective time of the First Step Merger (the Effective Time) was
converted into an option or right to purchase that number of
shares ERI Stock equal to the number of shares of Isle Stock
subject to the stock option multiplied the Stock Consideration at
an exercise price equal to the exercise price of the Isle stock
option divided by the Stock Consideration. Each restricted share
of Isle Stock that was outstanding (or deemed outstanding)
immediately prior to the Effective Time was converted into a
restricted share of ERI Stock in an amount equal to the Stock
Consideration, with aggregated fractional shares rounded to the
nearest whole share. Each Isle performance stock unit that was
outstanding immediately prior to the Effective Time was converted
into a number of performance stock units in respect of ERI Stock
in an amount equal to the Stock Consideration. Each Isle
restricted stock unit, deferred stock unit or phantom unit
(collectively, RSUs) was converted into a number of restricted
stock units, deferred stock units or phantom units, as
applicable, in respect of shares of ERI Stock in an amount equal
to the Stock Consideration, with aggregated fractional shares
rounded to the nearest whole share. Each converted stock option,
restricted share, performance stock unit and RSU remains subject
to the same restrictions and other terms as are set forth in, and
will continue to vest or accelerate, if unvested, in accordance
with, the applicable Isle stock plan, award agreement to which
the stock option, restricted share, performance stock unit or
RSU, as applicable, was granted, and any other relevant
agreements (such as an employment agreement).
Based on the closing price of $19.12 per share of ERI Stock on
the NASDAQ Global Select Market on April28, 2017, the aggregate
implied value of the consideration paid to former holders of Isle
Stock in connection with the consummation of the Mergers was
approximately $1.096billion, including approximately $544.3 in
ERI Stock and approximately $552.0million in cash.
The foregoing description of the Merger Agreement and the Mergers
is not complete and is qualified in its entirety by reference to
the Merger Agreement filed as Exhibit2.1 hereto and incorporated
herein by reference.
Item2.03 Creation of a Direct Financial Obligation or
an Obligation under an Off-Balance Sheet Arrangement of a
Registrant
The information set forth under Item1.01 above with respect to
the 2025 Notes Supplemental Indenture and the Joinder and
Assumption Agreement is incorporated herein by reference.
Item3.03 Material Modification to Rights of Security
Holders
The information set forth under Item1.01 above with respect to
the Registration Rights Agreement is incorporated herein by
reference.
Item5.02 Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain
Officers
to the Merger Agreement, as of the effective time of the Second
Step Merger, the Company expanded its board of directors from
seven (7)directors to nine (9)directors and appointed Bonnie
Biumi and GregoryJ. Kozicz, two members of the board of directors
of Isle mutually agreed upon by the Company and Isle, to such
newly created vacancies.
The Company expects to pay annual compensation to each of Bonnie
Biumi and GregoryJ. Kozicz equal to $60,000 in cash plus grants
of equity in the Company with value equal to $150,000. The
Company also expects to pay additional fees to each of Bonnie
Biumi and GregoryJ. Kozicz in connection with such directors
membership or chairmanship of board committees.
Item9.01 Financial Statements and
Exhibits
| (a) | Financial Statements of Businesses Acquired. |
The audited consolidated balance sheets of Isle as of April24,
2016 and April26, 2015 and the audited consolidated statements of
operations, consolidated comprehensive income (loss),
consolidated statements of stockholders equity and consolidated
statements of cash flows of Isle for the years ended April24,
2016,April26, 2015 and April27, 2014 and the notes related
thereto are attached hereto as Exhibit99.1 and are incorporated
herein by reference.
The unaudited consolidated balance sheet of Isle as of January22,
2017 and the unaudited consolidated statements of operations,
consolidated statements of stockholders equity and consolidated
statements of cash flows of Isle for the nine months ended
January22, 2017 and January24, 2016 and the notes related thereto
are attached hereto as Exhibit99.2 and are incorporated herein by
reference.
| (b) | Pro Forma Financial Information. |
The selected unaudited pro forma condensed combined financial
data for the year ended December31, 2016 are attached hereto as
Exhibit99.3 and are incorporated herein by reference. The
selected unaudited pro forma condensed combined financial data
for the three months ended March31, 2017 will be filed to an
amendment to this Current Report on Form8-K no later than 71days
following the date that this report is required to be filed.
| (d) | Exhibits. |
The following exhibits are filed with this report:
|
Exhibit No. |
Description |
|
| 2.1 |
Agreement and Plan of Merger, dated as of September19, 2016, by and among Isle of Capri Casinos, Inc., Eldorado Resorts, Inc., EagleI Acquisition Corp. and Isle of Capri Casinos LLC (f/k/a EagleII Acquisition Company LLC) (incorporated by reference to Exhibit2.1 to Eldorado Resorts Inc.s Current Report on Form8-K filed on September22, 2016). |
|
| 4.1 |
Supplemental Indenture, dated as of May1, 2017, by and among Eldorado Resorts, Inc. and the guarantors party thereto and U.S. Bank National Association. |
|
| 4.2 |
Fourth Supplemental Indenture, dated as of May1, 2017, by and among Eldorado Resorts, Inc., the guarantors party thereto and U.S. Bank National Association. |
|
| 4.3 |
Borrower Joinder and Assumption Agreement, dated as of May1, 2017, by and among Eldorado Resorts, Inc., Isle of Capri Casinos LLC and JPMorgan Chase Bank, N.A. |
|
| 4.4 |
Guaranty Agreement, dated as of May1, 2017, by and among the guarantors party thereto and JPMorgan Chase Bank, N.A. |
|
| 4.5 |
Registration Rights Agreement, dated as of May1, 2017, by and among Eldorado Resorts, Inc., Recreational Enterprises, Inc., GFIL Holdings, LLC and certain of its affiliates. |
|
Exhibit No. |
Description |
|
| 99.1 |
The audited consolidated balance sheets of Isle of Capri Casinos, Inc. as of April24, 2016 and April26, 2015 and the audited consolidated statements of operations, consolidated statement of comprehensive income (loss), consolidated statements of stockholders equity and consolidated statements of cash flows for the years ended April24, 2016, April26, 2015 and April27, 2014, and the related notes thereto (incorporated by reference to Exhibit99.1 to Isle of Capri Casinos, Inc.s Current Report on Form8-K, filed on December21, 2016). |
|
| 99.2 |
The unaudited consolidated balance sheet of Isle of Capri Casinos, Inc. as of January22, 2017 and January24, 2016 and the unaudited consolidated statement of operations, consolidated statements of stockholders equity and consolidated statement of cash flows of Isle for the nine months ended January22, 2017 and January24, 2016 and the notes related thereto (incorporated by reference to Item1 of Isle of Capri Casinos, Inc.s Quarterly Report on Form10-Q, for the quarterly period ended January22, 2017, filed on February24, 2017). |
|
| 99.3 |
Selected unaudited pro forma condensed combined financial data for the year ended December31, 2016 (incorporated by reference to Exhibit99.1 to Eldorado Resorts Inc.s Current Report on Form8-K filed on March13, 2017). |
About Eldorado Resorts, Inc. (NASDAQ:ERI)
Eldorado Resorts, Inc. (ERI) is a gaming and hospitality company. The Company owns and operates gaming facilities located in Ohio, Louisiana, Nevada, Pennsylvania and West Virginia. The Company’s segments include Nevada, Louisiana and Eastern. The Company owns and operates various properties, such as Eldorado Resort Casino Reno, which is a 814-room hotel, casino and entertainment facility; Silver Legacy Resort Casino, which is a 1,711-room themed hotel and casino; Circus Circus Reno, which is a 1,571-room hotel-casino and entertainment complex; Eldorado Resort Casino Shreveport, which is a 403-room, all suite art deco-style hotel and tri-level riverboat dockside casino; Mountaineer Casino, Racetrack & Resort, which is a 354-room resort with a casino and live thoroughbred horse racing; Presque Isle Downs & Casino, which is a casino and live thoroughbred horse racing facility with slot machines, table games and poker located in Erie, Pennsylvania, and Eldorado Gaming Scioto Downs. Eldorado Resorts, Inc. (NASDAQ:ERI) Recent Trading Information
Eldorado Resorts, Inc. (NASDAQ:ERI) closed its last trading session up +0.02 at 19.15 with 948,145 shares trading hands.