Combination of Caesars and Fertitta brings together two iconic and highly complementary platforms to create a dynamic suite of gaming, entertainment, and restaurant brands
Caesars Entertainment has entered into an agreement to be acquired by Fertitta Entertainment in an all-cash transaction valued at $17.6 billion.
The purchase price includes the assumption of $11.9 billion of Caesars’ outstanding debt.
The agreement will see Caesars’ shareholders receive $31.00 per share in cash, representing a 49 per cent premium to the unaffected share price as of February 25, the last trading day before rumours of a potential transaction.
Caesars’ Board of Directors has approved the transaction and recommends that its shareholders adopt and approve the merger agreement.
“The Board, after detailed consideration with the assistance of its outside financial and legal advisors, determined that the immediate cash premium offered by this transaction is compelling for Caesars shareholders, and its approval of this transaction underscores its commitment to drive and deliver value for shareholders,” said Caesars.
According to Caesars, Fertitta Entertainment brings a proven operating model with a track record of successfully integrating and growing leading hospitality and entertainment businesses.
The combined company will offer guests an even broader array of destinations and experiences, all connected by the Caesars Rewards loyalty network.
On a combined basis, guests will enjoy access to an expansive suite of diversified offerings, comprising 60 casino resorts and gaming facilities, online gaming including sports betting, iCasino, and poker through Caesars’ leading digital platform, retail sports betting at over 200 third-party locations through the William Hill brand, and over 600 Fertitta Entertainment outlets, including Landry’s full-service restaurants, plus multiple amusement, entertainment and aquarium venues.
Caesars CEO Tom Reeg, chief financial officer Bret Yunker, and president and chief operating officer Anthony Carano, are expected to remain in their roles, alongside other members of the corporate management team and property-level management and personnel.
The proposed transaction is not subject to a financing condition.
The transaction will be financed through a combination of equity contributed by Fertitta Entertainment, assumed Caesars’ debt, and new committed debt financing arranged by a group consisting of ten banks.
The transaction is subject to the approval of Caesars Entertainment shareholders and the satisfaction of customary closing conditions, including applicable regulatory approvals.
In addition, the Carano family, which owns approximately 5 per cent of the outstanding shares of Caesars’ common stock, has agreed to roll a portion of their equity interests into Fertitta Entertainment.
Upon completion of the transaction, shares of Caesars’ common stock will no longer be listed on NASDAQ.
The agreement includes a “go-shop” period through July 11, during which time Caesars and its financial and legal advisors may solicit, consider and negotiate alternative acquisition proposals from third parties.
Prior to a vote of the shareholders of Caesars, the Caesars Board will have the right to cause the company to terminate the agreement to enter into an alternative transaction providing for a superior proposal, subject to the terms and conditions of the definitive agreement.
PJT Partners is serving as exclusive financial advisor, Latham & Watkins is serving as legal counsel, and Skadden, Arps, Slate, Meagher & Flom is serving as antitrust counsel to Caesars Entertainment.
Freshfields is serving as counsel to the Carano family. Morgan Stanley & Co. and Goldman Sachs & Co. are serving as financial advisors and White & Case is serving as legal counsel to Fertitta Entertainment.
Fertitta Entertainment’s gaming division includes the renowned Golden Nugget Hotel and Casino concept, with locations in Las Vegas, Lake Tahoe, and Laughlin (Nevada); Atlantic City (New Jersey); Biloxi (Mississippi); Lake Charles (Louisiana) and Cripple Creek (Colorado).
Other investments include multiple five and four-star hotel properties, as well as the NBA’s Houston Rockets.
Shares in Caesars Entertainment Inc (NASDAQ:CZR) closed 1.41 per cent higher at $28.78 per share in New York Wednesday, and gained a further 2.08 per cent to $29.38 in pre-market.