Rumors have recently swirled regarding Caesars Entertainment’s availability for acquisition, but it has now reached a critical stage where two of the leading buyers have been identified, and a bidding war among major sports betting operators could ensue.
Battling Billionaires
Carl Icahn made his fortune primarily as a corporate raider, buying companies just to strip their assets and sell them to the highest bidder, leaving only the commercial carcass of what was viable employment for its former workforce.
At 90 years old, Icahn is still making deals while wielding a fortune of nearly $7 billion. Icahn Enterprises has reportedly made a bid of $33 per share, but that offer is a close second to a fellow billionaire, Tilman Fertitta, the CEO of the Golden Nugget and owner of the NBA’s Houston Rockets, who has reportedly sweetened the pot to $34 per share.
Caesars Stock Jumps On Rumors
Caesars’ stock has risen nearly 40% over the past month due to the rumored buyouts. The iconic Las Vegas company is worth a reported $30 billion but has racked up $20 billion in debt. However, the synergy and economies of scale that Tillman could deliver with his other hospitality and gaming companies, like Landry’s, Golden Nugget, and Wynn Resorts, of which he is the largest shareholder, appear to be an ideal fit.
Las Vegas-based consultant Brendan Bussmann of B Global Advisors commented on the possibility of Tillman adding Caesars to his expansive gaming portfolio. “He’s got a whole plethora of different market segments from the middle- to high-end in all of those chains, and being able to do that, I think that bodes well for what he sees as opportunity as it relates to the gaming industry,” Bussmann said.
Icahn Still In The Mix
However, Carl Icahn remains a potential contender, given that he played a key role in convincing Caesars to sell to El Dorado Resorts in 2020, just a year after securing a substantial stake in the Sin City mainstay. Moreover, a year ago, Caesars agreed to appoint two directors to its board who are executives of Icahn Enterprises.
“[Icahn] wants to be involved in the conversation, and I welcome him to join us,” Caesars CEO Tom Reeg stated at the East Coast Gaming Congress last year. “We have a great relationship.”
Ambassador Fertitta
Tilman Fertitta is currently serving as the US ambassador to Italy and San Marino, which has obligated him to remove himself from his company’s daily duties to avoid a conflict of interest.
“Additionally, I will continue to retain a passive interest in these entities, but I will not provide services material to the production of income,” Fertitta said at the time. “Instead, I will receive only passive investment income. With regard to each of these entities, I will not participate personally and substantially in any particular matter that, to my knowledge, has a direct and predicable effect on the financial interests of the entity or its underlying holdings, unless I first obtain a written waiver pursuant to 18 U.S.C. § 208(b)(1).”
It is possible that Fertitta’s acquisition of Caesars could trigger scrutiny of his capacity as both a US ambassador and a titan of industry purchasing a major gaming corporation like Caesars.
“In the event that an actual or potential conflict of interest arises during my appointment, I will consult with an agency ethics official and take the measures necessary to resolve the conflict, such as recusal from the particular matter or divestiture of an asset,” Fertitta wrote.
