Caesars is expected to confirm that its board has approved its potential sale by the end of this week amid pressure from its largest stockholder
Las Vegas casino and hospitality powerhouse Caesars Entertainment Corp. is reportedly putting itself on the market as soon as this week, the New York Post reported Wednesday citing unnamed sources familiar with the latest developments inside the company.
It is believed that the casino operator, which owns 55 properties across four continents, has finally succumbed to pressure from New York activist investor Carl Icahn. The businessman recently became Caesars’ largest shareholder. He first announced that he has begun building a stake in the company early this year. His interest has grown to 28.5% since then.
Mr. Icahn has previously said that he believes that a sale or a merger would be the best path forward for Caesars, which emerged from a long and complex bankruptcy in the fall of 2017 and has embarked on a mission to reduce a hefty $18 billion debt while expanding across multiple verticals.
According to sources, the company will announce this week that its board has approved a sale process. Caesars recently appointed three new members to its board who were named by Mr. Icahn. A fourth member picked by the businessman is likely to join the company’s board in just a few days.
Under an agreement between Mr. Icahn and Caesars, the activist investor would be allowed to increase his board representation by a fourth member if the company fails to name a replacement to its outgoing CEO Mark Frissora by April 15.
Tilman Fertitta Renews Takeover Bid
It is also understood that another potential buyer of Caesars has been given access to the company’s financials. According to sources, Texas businessman Tilman Fertitta was recently allowed to conduct due diligence. Mr. Fertitta is the owner of the Golden Nugget casino chain.
Last fall, the billionaire made an offer to merge his gambling empire with Caesars, but the latter rebuffed his bid. It emerged earlier this year that Mr. Fertitta was still interested in a tie-up and was preparing to make another offer.
Another suitor was offered a peek into Caesars’ financial records last month. News broke in March that the company was in early merger talks with rival Eldorado Resorts. The latter operator manages 26 properties in multiple states around the US.
Aside from a sale, Mr. Icahn is also believed to be pressuring Caesars to cut corporate costs. The company announced not long ago that it would trim its corporate workforce to reduce annual expenses.
Its plan involves eliminating currently vacant positions and laying off employees mostly based at its Las Vegas headquarters. The move is expected to reduce the company’s costs by $40 million.
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