aesars and Enjoy will also cooperate on marketing and player development, increasing each company's distribution capacity and strengthening the value proposition to their customers through the ability to offer greater amenities to customers who consolidate their play with the two firms.
"Enjoy's strong regional expertise combined with Caesars' global network and operating proficiency will create a strong value proposition for customers of Punta Del Este and Enjoy's portfolio of properties," said Gary Loveman, Chairman, CEO and President of Caesars Entertainment. "The transaction delivers excellent value to our shareholders, including a retained interest in the future growth of Conrad and an ownership position in one of Latin America's leading casino operators. This transaction increases Caesars' distribution in Latin America and provides us greater exposure to this fast growing market."
“This acquisition will further solidify Enjoy's position as the pre-eminent distributor of casino entertainment in Latin America," said Javier Martinez, Enjoy's CEO. "With Conrad, we are adding South America's premier gaming resort property to our portfolio. Further, the alliance with Caesars will reinforce our commercial strategies by offering new and diverse alternatives to our customers. This will surely benefit our company and our shareholders, and above all, our country and the domestic tourism industry."
Upon the closing of the transaction, Enjoy will assume primary responsibility for management of the Conrad. Enjoy and Caesars will enter into an agreement that will provide Conrad, Enjoy and Caesars customers with enhanced benefits and entertainment opportunities throughout South America and Caesars world-wide portfolio of casino resorts.
Under the terms of the transaction, Enjoy will acquire 45% of Baluma for us$ 139.5 million in cash and stock. Following the transaction, Caesars will own 10% of Enjoy, which it will receive through the subscription of shares in a capital raising that Enjoy will conduct prior to closing. Enjoy will have the option to acquire the remaining stake in Baluma, between years three and five of the relationship. Caesars will have the right to nominate one member to the Enjoy Board.
Since opening in January 1997, the Conrad has been a significant contributor to the economic growth and development of Uruguay by attracting many international visitors and hosting large-scale international conventions. The resort draws customers primarily from Brazil, Argentina and Uruguay, and in 2011, generated approximately US$157 million in net revenue. The Conrad has 542 slot machines, 75 gaming tables and 294 rooms. The resort also employs more than 2,000 people during peak season, making it one of the largest private employers in Uruguay. In May, Caesars obtained an extension of the company's gaming license through 2036.
Deutsche Bank Securities served as financial advisor to Enjoy on this transaction. The closing of the transactions between Caesars and Enjoy remains subject to a number of conditions, including regulatory and governmental approvals in both Uruguay and Chile.