International edition
September 17, 2021

Arguing it would saddle the casino giant with too much debt

Caesars is expected to turn down Golden Nugget’s merger proposal

Caesars is expected to turn down Golden Nugget’s merger proposal
News of Fertitta’s overture last week sent Caesars’ shares soaring 18 percent over two days, leading it to close at $10.20 Friday, giving Caesars a market cap of $6.8 billion.
United States | 10/23/2018

Caesars’ board is expected to reject the offer brought by billionaire owner of the Golden Nugget casino chain, who approached the company earlier this month to merge with his own gaming empire.

I

t appears that Caesars isn’t interested in any of Tillman Fertitta’s Golden Nuggets, New York Post reports.

Fertitta contacted Caesars Entertainment earlier this month to merge with his own gaming empire, which includes the Golden Nugget casino chain.

But the company’s board is likely to unanimously reject Golden Nuggets' proposal as soon as this week, believing it would saddle the casino giant with too much debt, two sources close to the situation told The Post.

News of Fertitta’s overture last week sent Caesars’ shares soaring 18 percent over two days, leading it to close at $10.20 Friday, giving Caesars a market cap of $6.8 billion.

That looks like a big bite for the Texas tycoon, whose net worth is estimated at just $4.5 billion. Caesars still has $9 billion in debt after emerging from bankruptcy a year ago, and Fertitta’s deal would add to that load, sources said.

“That is certainly not attractive,” a source with knowledge of Caesars’ thinking said, noting that it was a $25 billion debt load from a 2008 leveraged buyout that had plunged Caesars into bankruptcy in 2015.

Instead, Caesars — which also owns the Harrah’s and Bally’s casinos, as well as the Planet Hollywood chain — is in advanced talks to buy a few properties from Jack Entertainment, a Midwest-based gaming concern that owns six casinos in Cleveland, Cincinnati and Detroit.

Indeed, some sources close to Caesars believe that word of Fertitta’s offer got leaked by hedge funds like Canyon Partners, which owns a 10 percent Caesars stake, and HG Vora Capital, which The Post first reported last month had built a 4.9 percent stake in Caesars.

Spokespersons for Canyon Partners and HG Vora separately said Monday that their funds did not leak any information regarding any Caesars transaction.

Impatient with Caesars’ sagging stock, the hedgies are looking to derail the discussions with Jack, even as they look to prod Caesars into a deal to buy Fertitta’s gaming company in a reverse merger, according to sources.

“I think some people are hoping this puts Jack’s on hold,” one source close to the talks confirmed.

Nevertheless, the Caesars board, which includes partners from Apollo and TPG, is “united” about completing the Jack deal, which could be valued at more than $1 billion, according to the source.

Under the deal, Caesars would buy the casino operations, while Caesars’ separately traded real estate arm, VICI Properties, would buy the land under them and lease it back to them in a long-term deal, a source close to those talks said.

Insiders likewise noted that a Jack deal could make a case for the continued leadership of Caesars Chief Executive Officer Mark Frissora, whose contract is set to come up in February.

Caesars, which operates 49 casinos across the US, Canada, the UK, Egypt and South Africa, is looking to catch up to rivals like MGM Resorts and Wynn Resorts.

Last November, Caesars scooped up privately owned casino and horse racing company Centaur Holdings for $1.7 billion in cash.

Caesars declined to comment. Jack Entertainment did not return calls.

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