Caesars Entertainment has prolonged the exclusive negotiation period regarding an $18 billion acquisition proposal from billionaire Tilman Fertitta, as reported by Bloomberg News, citing sources familiar with the matter.
Fertitta, who serves as the U.S. ambassador to Italy and San Marino and is the owner of Fertitta Entertainment, has proposed a price of $32 per share for the Las Vegas-based company, while also taking on over $11 billion in Caesars' debt. Following this announcement, Caesars' shares increased by 2.1%, reaching $27.80.
The financing plan suggested by Fertitta includes between $2 billion and $3 billion in equity, along with $4 billion to $5 billion in new loans secured by the company’s assets.
Fertitta aims to merge Caesars with his current enterprises, which include Landry's and Golden Nugget Hotel and Casinos, thereby forming a larger casino conglomerate.
Caesars has faced challenges due to a decrease in visitors to Las Vegas, which has negatively impacted revenue across the city's hotels, resorts, and casinos. Additionally, the company has struggled to keep pace in the online betting market against larger competitors like FanDuel and DraftKings.
This is not Fertitta's first attempt to engage with Caesars; he previously proposed a merger in 2018 involving his gaming business. His company operates over 600 properties in more than 15 countries, including popular restaurant brands such as Rainforest Café and Bubba Gump Shrimp, and owns the NBA team Houston Rockets.
On the other hand, Caesars manages more than 50 casinos across North America, including well-known venues like Caesars Palace, Harrah’s, and Eldorado, and also offers a retail and online sports betting application.
Initial reports of exclusive discussions between Fertitta and Caesars surfaced in March, when The Wall Street Journal indicated that Fertitta Entertainment had made a more attractive offer than that of investor Carl Icahn’s firm.
Prior to the interest in a takeover, Caesars' shares had plummeted approximately 40% over the past year. The company was taken private in 2008 through a leveraged buyout orchestrated by Apollo Global Management and TPG, and its operating unit emerged from bankruptcy in 2017. Subsequently, Eldorado Resorts acquired Caesars in 2020, with Caesars CEO Tom Reeg stepping in as the CEO of the newly combined entity.