Caesars announced it will be taken private by Fertitta Entertainment in an all-cash transaction valued at $17.6 billion.
Thursday’s announcement comes after months of rumors about the potential deal. Fertitta, owned by billionaire Tilman Fertitta, is paying $31 per share. That represents a 49% premium compared to the price of Caesars stock on Feb. 25, the last day before rumors of the takeover were first reported.
The deal, which includes assuming nearly $12 billion in outstanding debt, will be financed through equity and debt financing from 10 banks.
Caesars has the right to consider and negotiate alternative proposals through July 11. The deal requires shareholder and regulatory approval.
CZR closed at $28.78 Wednesday and is up in pre-market trading on the news.
Caesars, Fertitta combo could face issues
The press release boasts that the combined company will include 60 casinos and gaming facilities, but that may not be true.
Past casino combinations have seen companies forced to sell properties in certain markets to ensure they remain competitive without one company owning too many of the casinos.
For example, there are nine casinos in Atlantic City, three of which are owned by Caesars as well as Fertitta’s Golden Nugget.
The two also own casinos in Lake Charles, Louisiana, Biloxi, Mississippi and Las Vegas and Laughlin.
Whatever casinos remain after any potential sales will maintain the status quo, according to the release. The C-suite including CEO Tom Reeg, CFO Bret Yunker and COO Anthony Carano, along with other corporate management and property-level management, will keep their roles.
Will betting on Rockets be limited nationwide?
Fertitta also owns the NBA‘s Houston Rockets, which threw into question whether he could accept NBA bets at his Golden Nugget in Atlantic City in the early days of New Jersey sports betting.
It was eventually approved that his casino could accept bets on NBA games as long as they did not involve the Rockets.
That could become a topic of discussion for regulators across the country.
