Billionaire Tilman Fertitta is currently engaged in exclusive negotiations to purchase Caesars Entertainment, a major casino operator, in a deal valued at approximately $7 billion. This move follows his offer surpassing a competing bid from Carl Icahn’s investment firm, as reported by The Wall Street Journal based on insights from insiders.
According to reports, Fertitta’s venture, Fertitta Entertainment, is proposing to acquire Caesars at around $34 per share. This offer represents an approximate premium of 31% over the company’s closing price from Tuesday.
Fertitta is notably the owner of the Golden Nugget casino chain, the Landry’s restaurant group, and the Houston Rockets NBA franchise. It is important to note that a formal announcement is not expected soon, and the ongoing discussions might not yield a finalized deal.
In trading on Wednesday, shares of Caesars increased by 12%, ultimately closing at $29.07 in New York. The company operates more than 50 resorts under various brands, including Caesars, Harrah’s, Eldorado, and Circus Circus.
Caesars has also been presented with an all-cash bid of approximately $33 per share from Icahn Enterprises, adding further competition to the bidding landscape.
Furthermore, Vici Properties, a real estate investment trust and significant landlord to Caesars, has been regarded as a potential hurdle to any takeover. However, the offers made by both Fertitta and Icahn have been structured in a manner that could facilitate a division of the company without needing Vici’s approval.
Caesars’ Chief Executive, Tom Reeg, is anticipated to participate in discussions regarding either proposal, according to sources close to the negotiations.
Before the recent interest in a takeover, Caesars’ shares had plummeted approximately 40% over the past year. The company transitioned to private ownership back in 2008 following a leveraged buyout linked to Apollo Global Management and TPG. Its operating unit successfully emerged from bankruptcy in 2017, later being acquired by Eldorado Resorts in 2020, with Reeg taking the reins as CEO of the combined entity.