Shareholders of Caesars Entertainment Inc. are scheduled to cast their votes on September 22 regarding billionaire Tilman Fertitta's proposed acquisition of the casino operator for $17.6 billion. This information comes from a definitive proxy statement submitted to the U.S. Securities and Exchange Commission.
The special meeting will take place at 9 a.m. at the Eldorado Resort & Casino in Reno, as reported by the Las Vegas Review-Journal. Shareholders who were on record as of August 21 will have the opportunity to vote on Fertitta's all-cash offer of $31 per share, which, if approved, would privatize Caesars.
For the deal to go through, it requires the backing of a majority of Caesars' approximately 203.8 million outstanding shares. The board of Caesars has recommended that shareholders endorse the transaction.
Recreational Enterprises Inc., which is under the control of the Carano family, has pledged to vote its approximately 8.6 million shares—about 4.2% of Caesars' total stock—in favor of the acquisition.
Caesars operates over 50 casino resorts across 16 states, including eight locations on the Las Vegas Strip.
Tilman Fertitta, a billionaire from Texas and the current U.S. ambassador to Italy and San Marino, oversees Fertitta Entertainment Inc., based in Houston. His portfolio includes Landry’s restaurant brands, the NBA's Houston Rockets, and the Golden Nugget casino. Additionally, he holds a significant stake in Wynn Resorts.
The acquisition will be executed through Fertitta Gaming Holdco LLC, a Nevada-based company established on May 26 specifically for this purpose. Its subsidiary, Empire Merger Sub Inc., will merge with Caesars, making Caesars a wholly owned subsidiary of Fertitta Gaming Holdco.
This transaction would notably enhance Fertitta's casino portfolio and will require gaming approvals in the regions where Caesars operates. There may also be regulatory or competitive issues due to Fertitta’s existing Golden Nugget properties in markets where both companies are active.
For instance, in Atlantic City, New Jersey, Fertitta would control four out of the city's nine casinos if the deal is finalized.
Fertitta's executives previously estimated that the licensing process could take nine to ten months.
The filing on Tuesday shed light on the lengthy bidding war between Fertitta and activist investor Carl Icahn, as well as the financial and regulatory challenges that still lie ahead for the deal.
Icahn initiated the bidding with an offer of $28.50 per share in January, with Fertitta entering shortly after at $28.75 per share. Both parties eventually raised their bids to $32 per share, but Icahn withdrew in February, leading Caesars to enter exclusive negotiations with Fertitta.
Fertitta later lowered his offer due to rising financing costs and economic uncertainty. Caesars rejected his $31-per-share proposal in April, countering with $31.50, before finally settling on $31.25. Fertitta did not increase his offer, and Caesars ultimately accepted the $31 per share proposal.
Caesars' CFO Bret Yunker estimated in April that financing costs had surged by about $40 million annually since the sale process began. Icahn returned on July 10, the last day of Caesars' 45-day “go-shop” period, with a cash offer of $34 per share.
Despite the higher bid, Caesars identified significant obstacles with Icahn's proposal, such as high leverage, limited liquidity, and concerns that much of the new company's free cash flow would be required to service the debt. His financing plan also called for substantially lower capital expenditures.
Icahn had proposed $6.5 billion in new debt and initially required that at least 5 million Caesars shares held by the Carano family be included in the new company. Jefferies, Icahn's financial advisor, informed Caesars' advisors that it could not fulfill the proposed debt commitment without commitments from unidentified investors.
Later, Icahn suggested replacing $1 billion of debt with additional equity, but Caesars maintained that questions regarding the financing and the financial health of the resulting company still persisted.