MTR Gaming Group And Eldorado Resorts To Merge; Stock Surges

(RTTNews) - MTR Gaming Group, Inc. (MNTG) and Eldorado Resorts LLC announced that they have entered into a definitive agreement under which MTR Gaming Group will combine with the parent company of Eldorado Resorts, LLC in a stock merger.

As part of the transaction, a cash election option will be offered at $5.15 per share for up to 5.8 million shares to MTR Gaming's current stockholders. MTR Gaming's remaining common shares will be exchanged for shares in the combined new company. The combined new company will remain publicly traded and be named Eldorado Resorts Inc.

Based on the transaction value of $5.15 per share, the combined new company will have a pro forma enterprise value of about $1.0 billion.

Based on Eldorado's current LTM EBITDA as of June 30, 2013 , (including its interest in Silver Legacy, a 50 / 50 joint venture with MGM Resorts International), Eldorado's owners would be issued 35.6 million shares, or approximately 55% of the total shares, in the combined new company valued at $5.15 per share.

Gary Carano will be named the Chief Executive Officer of the combined company. The anticipated closing of the transaction is in mid-2014. It is subject to the customary regulatory and closing conditions being satisfied, including approval by MTR Gaming's stockholders.

In a separate press release, MTR Gaming Group Inc. announced that it has appointed Joseph Billhimer as permanent President and Chief Operating Officer, effective immediately.

Billhimer has 30 years of experience working in the gaming industry, having joined MTR Gaming in April 2011. Prior to joining MTR Gaming, he was the Founder and a Principal of Foundation Gaming Group, an advisory and management services firm for the gaming industry. Before Foundation Gaming Group, Billhimer was President and CEO of Premier Entertainment LLC, the developer and parent of the Hard Rock Hotel and Casino in Biloxi, Mississippi, from 2003 to 2008.

Prior to Premier Entertainment, Billhimer spent three years as President and General Manager of Caesars Entertainment's Grand Casino Resort in Gulfport, MS, and prior to that experience, eight years with Pinnacle Entertainment where he was Executive Vice President and General Manager of Casino Magic in Bay St. Louis, MS.

MNTG is currently trading at $4.25, up $0.67 or 18.72 percent.