Caesars-Eldorado shares spike on word that merger is going ahead

US casino giants Caesars Entertainment and Eldorado Resorts are pushing ahead with plans to merge their operations, although the timeline will likely be pushed back a few months.

On Tuesday, CNBC quoted a source with firsthand knowledge of the imminent union of Caesars and Eldorado saying the transaction, which was expected to close sometime in April, will now likely not be a done deal until June.

The delay has been blamed on disruptions stemming from the COVID-19 pandemic, which has shut down all commercial casino operations across the country. Social distancing efforts aimed at minimizing further transmission of the coronavirus have resulted in the postponement of public hearings with gaming regulators in Indiana, New Jersey and Nevada.

Delays in obtaining regulatory approval in the countless other states in which the two companies operate have already proven costly. The deal terms require Eldorado to pay Caesars shareholders a monthly penalty of 10 cents per share if the transaction wasn’t closed within nine months of its public announcement. That nine-month deadline expired last week.