Golden Nugget owner Tilman Fertitta has entered the race to acquire gambling giant Caesars Entertainment in a deal worth a reported $7bn, with billionaire Carl Icahn having already tabled a bid for the Las-Vegas-based entertainment company.
If the deal goes ahead, it would represent one of the biggest in the industry. However, Caesars is weighing up several options and is believed to be interested in exploring an acquisition led by the existing management team.
Caesars' rise
Caesars Palace in Las Vegas opened its doors in 1966 and, to this day, remains one of the largest and most popular venues in Sin City. The casino company has changed hands several times.
Significantly, it was acquired by Harrah's Entertainment in 2005 and Eldorado Resorts in 2020.
As well as its flagship casino, the company today owns more than 50 properties, including Flamingo, Planet Hollywood and The Cromwell in Las Vegas. It also operates Caesars and Horseshoe brands online.
Tumbling share prices
While Caesars Entertainment, as a whole, remains one of the largest gambling companies in the world, its stock has declined in recent years.
Its share price reached a high of $120 in 2021. In the following five years, that price tumbled to less than a quarter of its peak. After news of the potential acquisition and its $34 share valuation, prices rebounded to nearly $30 but have fallen back to $27.
According to Forbes, Fertitta is worth more than $10bn, but the Fertitta deal isn't the only one under consideration. Billionaire investor Carl Icahn made an unofficial bid of $28.50 per share in January. After rumors of offers from other interested parties, Icahn tabled a bid of $33 per share. That offer is still under consideration.
According to analysts, Caesars are exploring other options and may be especially interested in a buyout headed by the current management team.
Fertitta courting Caesars' attention
Currently, though, it is Golden Nugget owner Fertitta's bid that leads the way, financially at least.
The businessman and diplomat was born in Texas; his career boomed after buying restaurant conglomerate Landry's in the 1980s.
A few decades later, in 2005, he bought Golden Nugget Casinos - including locations in Las Vegas and Laughlin, Nevada. He also owns a significant portion of Wynn Resorts stock and has owned the Houston Rockets NBA team since 2017.
This isn't the first time Fertitta has shown an interest in Caesars. In 2018, Fertitta suggested a merger between Caesars and his Golden Nugget casino chain.
The deal would have seen Caesars acquire Golden Nugget. But it was formatted to make Fertitta the major shareholder and CEO of the merged company. The deal did not go through, and two years later, Caesars was acquired by Eldorado in 2020.
This time around, Fertitta is proposing a straight acquisition – not a merger – but progression is not guaranteed. The deal would need to be agreed upon by the Board, shareholders and regulators.
At the very least, regulators would demand that Caesars sportsbook and casinos stop taking bets on Fertitta's Houston Rockets to prevent potential conflicts of interest and insider betting.
