Icahn reaches deal to sell Tropicana Entertainment

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Tropicana Entertainment Inc. announced on Monday a definitive sales agreement to sell its real estate to Gaming and Leisure Properties, Inc. and to merge its gaming and hotel operations into Eldorado Resorts Inc. for aggregate consideration of approximately $1.85 billion, according to a release from Tropicana. The company revamped Tropicana's management team, hiring Tony Rodio as chief executive, and reinvested "every single penny" of profits back into the company, Mr. Icahn said in prepared remarks.

NEW YORK - NOVEMBER 2: (U.S. TABS AND HOLLYWOOD REPORTER OUT) Finacier Carl Icahn is seen being interviewed at "David Moore's Funny Business Show" at Caroline's on Broadway on November 2, 2005 in New York City.

The Illinois transaction is expected to close in the fourth quarter of 2018, subject to regulatory approvals and other customary closing conditions and is subject to a customary working capital adjustment.

This is a developing story.

Icahn acquired Tropicana Entertainment in 2010, two years after Tropicana fell into bankruptcy.

For $640 million, Eldorado Resorts is buying the operations of seven hotel-casinos in six states, including two in Nevada - the Tropicana Laughlin and the MontBleu in South Lake Tahoe - and one each in Indiana (Tropicana Evansville), Louisiana (Belle of Baton Rouge), Mississippi (Trop Casino Greenville), Missouri (Lumiere Place in St. Louis) and New Jersey (Tropicana Atlantic City). The purchase also doesn't include the Tropicana property in Aruba.

Eldorado will acquire the operating assets of these properties and lease the real estate from Gaming and Leisure Properties through a new master lease with a 15 year initial term and four 5 year renewal periods.

The company, which bought Isle of Capri Casinos in a $1.7 billion deal in 2017, on Monday also agreed to acquire Grand Victoria Casino in Elgin, Illinois for $327.5 million in cash. Overall, the Tropicana portfolio is in good shape and we have no immediate significant capex plans for the properties.

Eldorado Resorts said the acquisitions will allow the company to enter two new gaming jurisdictions.

Additionally, Icahn past year sold the Trump Taj Mahal in Atlantic City to Hard Rock International, which is redeveloping the site as the Hard Rock Hotel & Casino Atlantic City.