What happened 

Shares of gambling giant Caesars Entertainment (NASDAQ:CZR) jumped 74.1% in the first half of 2019, according to data provided by S&P Global Market Intelligence, on buyout speculation and a subsequent announcement. 

So what 

After much speculation, Eldorado Resorts (NASDAQ:ERI) announced on June 24 that it was buying Caesars Entertainment for $12.75 per share in a deal that valued the company at about $17.3 billion. The buyout will be paid for with $8.40 per share in cash and 0.0899 shares of Eldorado for each share of Caesars Entertainment. Based on today's share price, that's a value of $12.86 per share of Caesars Entertainment. 

Panoramic view of the Las Vegas Strip.

Image source: Getty Images.

Activist investor Carl Icahn had been pushing for a sale of Caesars after building a large stake and demanding seats on the board of directors. He clearly won and now the casino icon is being sold to the much-smaller Eldorado. 

Now what 

The buyout from Eldorado is high risk because it layers on even more debt to an already-highly leveraged Caesars Entertainment. But for current investors it's a chance to get a premium on their stock and cash in on Icahn's buyout push. There won't be another one-time pop in the second half of the year, but now investors will want to start watching Eldorado's performance because about one-third of the buyout is in the company's shares and it needs to operate perfectly to make this deal a winner over the long term.