Billionaire Tilman Fertitta is currently engaged in exclusive negotiations to purchase Caesars Entertainment, a prominent casino operator, for approximately $7 billion. This development follows Fertitta's successful bid that surpassed an offer from investor Carl Icahn's firm, as reported by The Wall Street Journal, citing sources familiar with the discussions.
According to the report, Fertitta's company, Fertitta Entertainment, is considering a price of about $34 per share for Caesars. This proposed amount reflects a significant premium of around 31% compared to the company's closing price on Tuesday.
Fertitta is the owner of the Golden Nugget casino chain, the Landry's restaurant group, and the Houston Rockets NBA team. While an official announcement regarding the deal is not expected soon, the report indicates that the negotiations may not lead to a finalized agreement.
On Wednesday, Caesars' stock experienced a 12% increase, closing at $29.07 in New York. The casino operator manages over 50 resorts under various brands, including Caesars, Harrah's, Eldorado, and Circus Circus.
Icahn Enterprises had also made an all-cash offer of approximately $33 per share for Caesars. Additionally, Vici Properties, a significant real estate investment trust and landlord to Caesars, was previously perceived as a potential hurdle for a takeover. However, the bids from both Fertitta and Icahn are structured in a manner that could facilitate the separation of the company without needing Vici's approval, according to the report.
People familiar with the situation noted that Caesars' Chief Executive Officer, Tom Reeg, would likely play a role in either of the bids.
Prior to the emergence of takeover interest, Caesars' shares had declined by about 40% over the past year. The company went private in 2008 through a leveraged buyout orchestrated by Apollo Global Management and TPG, and its operating unit successfully exited bankruptcy in 2017. Subsequently, Eldorado Resorts acquired Caesars in 2020, with Reeg assuming the role of CEO of the newly formed entity.