NEW YORK CITY — Icahn Enterprises has agreed to sell Tropicana Entertainment Inc. to Gaming and Leisure Properties Inc. for $1.85 billion in a deal that includes all of Tropicana’s real estate. The company’s gaming and hotel operations will be merged into Eldorado Resorts Inc., which owns and operates 20 casinos in 10 states.
Under the agreement, Pennsylvania-based real estate investment trust Gaming and Leisure Properties will buy Tropicana’s real estate for $1.21 billion and lease properties to Eldorado Resorts. Eldorado will pay $640 million in cash and assume Tropicana’s cash and debt.
The transaction includes all of Tropicana’s locations except Aruba, which will close as a condition of the deal.
Icahn Enterprises invested in Tropicana when it was bankrupt in 2008, after state regulators deemed its former owner unfit to run a casino. The New York City-based investment company controlled by American businessman Carl Icahn hired Tony Rodio as chief executive and reinvested profits into operations. Carl Icahn has been chairman of Tropicana’s board since 2010.
“I am incredibly proud of what the entire Tropicana team has been able to accomplish over the past eight years, taking Tropicana from bankruptcy to one of the industry’s true success stories,” says Rodio.
“Icahn Enterprises first acquired an interest in Tropicana in 2008,” says Carl Icahn, chairman of Icahn Enterprises. “At that time, we identified this undervalued asset as being a perfect situation to deploy our modus operandi, by which we seek to acquire undervalued assets, nurture, guide and improve their condition and operations, and to ultimately greatly enhance value for all shareholders.”
Tropicana Entertainment, which is 84 percent owned by Icahn Enterprises, operates eight casinos and resorts in the United States and Aruba, including its flagship property, Tropicana Atlantic City.
The deal is expected to close in the second half of this year and is subject to receipt of gaming approvals and other closing conditions.
Eldorado Resorts said in a release that the company does not plan to make any significant changes to Tropicana immediately.