09/10/2013 10:00AM

MTR Gaming to merge with casino company Eldorado Resorts


MTR Gaming Inc., the owner and operator of racetrack-casinos Mountaineer Park, Presque Isle Downs, and Scioto Downs, has reached an agreement to merge with Eldorado Resorts, a private company that operates three casinos, the two companies announced on Monday.

The combined company will be called Eldorado Resorts Inc., the announcement said. Current shareholders of MTR will be given an option of selling up to 5.8 million shares for $5.15 a share, the companies said, while the owners of Eldorado will be issued 35.6 million new shares that will be initially priced at $5.15 per share. That will give the Eldorado owners a 55 percent stake in the merged company.

MTR’s stock on Monday closed at $4.17, up 60 cents.

If the merger goes through, the combined company will own and operate six casino properties in five states. Eldorado owns and operates two casinos in Reno, Nev., and a casino in Shreveport, La. One of the Reno casinos is operated in partnership with MGM Grand.

Casino companies have been under pressure over the past several years because of declining per-property revenues and profit margins due to the rapid expansion of casino gambling over the past five years and the effects of the recession on disposable income for lower-income people.