Another massive merger and acquisition deal within the US casino industry May be around the corner
A fresh round of industry buzz from Wednesday suggested that billionaire casino boss Tilman Fertitta has approached Caesars Entertainment Corp. about merging the vegas casino giant with his own Golden Nugget casino collection.
Resources advised the CNBC on Wednesday the Mr. Fertitta was hoping to lure Caesars with an offer for a reverse merger that will place Caesars because the acquirer. Company shareholders will remain shareholders in the joint business.
According to sources, it’s still uncertain whether the hospitality and gaming business will consider any deal from Mr. Fertitta given that Caesars’ market capitalization currently stands at about $6.3 billion, whereas Mr. Fertitta’s net worth was valued at $4.5 billion by Forbes. Besides Golden Nugget, his holdings also include the Houston Rockets National Basketball Association staff as well as dining and entertainment firm Landry’s.
Caesars emerged from a protracted and challenging Chapter 11 bankruptcy last fall and is seeking to improve its sustainability and also to catch up with competitions MGM Resorts International and Wynn Resorts. The business has said it would focus on acquisition and geographic growth as part of its post-bankruptcy expansion strategy.
The vegas hospitality and gaming giant lately closed the purchase of Indiana-based privately owned gaming and horse racing firm Centaur Holdings LLC for the entire amount of $1.7 billion, which Caesars paid in money. The deal will help the organization expand its presence in Indiana, an integral casino marketplace.
”Fun is just getting started at Caesars”
Chad Beynon, a senior analyst at Macquarie, told the CNBC on Wednesday that the planned merger of Caesars and Golden Nugget is a portion of a larger merger and acquisition trend inside the US gaming industry. The analyst further explained that low valuations could be among the main reasons why many significant casino companies are exploring M&A chances.
In accordance with Mr. Beynon, as Caesars has just emerged from bankruptcy protection, “fun is just getting started” in the casino and hospitality giant.
Reports emerged last month that hedge fund HG Vora Capital Management LLC had quietly built a nearly 5% stake in the gaming behemoth and has been pushing for the company to take consideration of different choices, including divestiture of assets or an outright sale.
According to a current round of reports, Caesars may be looking to divest itself of the off-Strip Rio All-Suite Hotel & Casino, the annual sponsor of the World Series of Poker. Rumors concerning the property’s sale happen to be popping out for years but a trade has never happened. It emerged a couple of years ago that PokerStars was thinking about purchasing the vegas casino. Those reports were even confirmed from the poker operator .
The business is set to launch two non-gaming resorts in Dubai next month and plans to break ground to a similar property in Mexico early next year. It also became known that Caesars is interested in joining an €8-billion mega-scheme to the building of an integrated resort with a casino close to the Greek capital Athens.
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