New York-listed casino operator Caesars Entertainment has agreed to give three board seats to individuals representing the Icahn Group.
The agreement sees three existing board members step down with immediate effect, to be replaced by Icahn Capital portfolio manager Courtney Mather, Icahn Enterprises chief executive Keith Cozza, and Icahn Enterprises director James Nelson.
The appointments gives investor Carl Icahn greater influence over the future of the company, in which the Icahn Group owns a 9.78 per cent shareholding.
In addition to the three board seats, Caesars has agreed to give the Icahn Group the right to appoint a fourth board member, if a new chief executive who is acceptable to the new directors is not named within 45 days.
In return, the Icahn Group has agreed to vote all of its shares in favour of each of Caesars' board nominees at the Company's 2019 Annual Meeting.
Caesars has been searching for a new chief executive since Mark Frissora announced in November 2018 that he would be leaving the company on February 8th.
“Our new colleagues bring diverse and relevant experience, and we look forward to them joining our board in our ongoing efforts to further enhance value for all shareholders,” said Caesars chairman James Hunt.
“Since the completion of Caesars' restructuring, we have been undergoing a strategic process to create value, and we will continue that process working with our new directors. On behalf of the entire board and Caesars' nearly 68,000 employees, I want to thank our departing director colleagues for their distinguished and tireless service to the company.”
Carl Icahn said of the agreement: “I believe the best path forward for Caesars requires a thorough strategic process to sell or merge the company to further develop its already strong regional presence, which will allow Caesars to continue to take advantage of the Caesars Rewards program bringing more and more players into Caesars' Vegas market.
“I expect this to make Caesars the most powerful competitor in Vegas, the gaming capital of the world. Caesars would be a great opportunity for certain investors who have already expressed interest, and I'm glad the board will explore these opportunities.
“Independent of strategic alternatives, I believe Caesars should also be focused on leadership succession, disciplined capital allocation, improving operating performance and optimizing real estate and other assets,” Icahn added.
The appointments are subject to customary regulatory approval and will see Cozza join Caesars’ Governance and Corporate Responsibility Committee, while Mather will be appointed to the Compensation and Management Development Committee. Both will also serve on the company’s Strategy and Finance Committee and Ad Hoc CEO Search Committee, with Nelson joining the Audit Committee.
Shares in Caesars Entertainment Corp. (NSQ:CZR) closed in New York Friday up 4.06 per cent at $8.97 per share.