A New York law firm is revisiting its investigation of Fertitta Entertainment Inc.’s (FEI) proposed $17.6 billion acquisition of Caesars Entertainment (NASDAQ: CZR) at a valuation of $31 per share.
Wohl & Fruchter, a firm specializing in merger and acquisition cases, securities fraud, consumer fraud, and shareholder derivative actions, has disclosed their renewed interest in the deal following Caesars’ proxy filing with the Securities and Exchange Commission (SEC) revealing a $34 per share takeover offer from Carl Icahn.
“Among other things, the proxy provided details concerning the discussions between the Caesars board and the Icahn Group after the Icahn Group submitted a bid of $34.00 per share in cash during the go-shop period,” according to a statement issued by the firm.
The board of directors at Caesars is endorsing the Fertitta bid and is informing shareholders of their support ahead of a special meeting on September 22 where investors will vote on the acquisition.
Wohl & Fruchter Previous Investigation into Fertitta’s Offer for Caesars
Wohl & Fruchter had previously examined the deal on the grounds that the $31 per share offer from Fertitta seemed undervalued.
“Wohl & Fruchter originally launched its investigation because the sale price is well below the price targets of multiple Wall Street analysts before the deal was announced,” noted the firm in the press release.
Several analysts have expressed concerns that the $31 per share offer does not adequately reflect the value of the Harrah’s operator. Prior to the official offer, some analysts believed that Caesars should be valued in the mid- to high $30s for a takeover.
Following the bid announcement, some analysts have stopped coverage on Caesars, while others have set the $31 per share takeover bid as their price targets. However, before the announcement, price targets of $33 and higher were seen on the casino stock.
Potential Class Action Suit in the Works?
While Wohl & Fruchter did not explicitly mention the possibility of class action litigation against Caesars or FEI, they are open to discussing options with Caesars investors at no cost.
Each class action related to mergers and acquisitions is unique, making it difficult to predict the outcome of any potential litigation against Caesars. However, many of these cases result in companies making additional disclosures, leading to voluntary dismissals. Caesars disclosed Icahn’s $34 per share offer, potentially affecting the outcome if a class action suit is pursued.