In the United States, the billionaire owner of casino operator, Landry’s Incorporated, Tilman Fertitta (pictured), has reportedly approached larger rival Caesars Entertainment Corporation regarding the possibility of a merger.
‘Reverse merger’ proposition:
According to a Wednesday report from the Reuters news service citing an unidentified source, 61-year-old Fertitta has proposed executing a ‘reverse merger’ that would see Caesars Entertainment Corporation serve as the buyer with its bevy of shareholders, which include private equity firms TPG Global and Apollo Global Management LLC, retaining their stakes in the enlarged enterprise.
Golden Nugget casino collection:
Reuters reported that Houston-based Landry’s Incorporated is responsible for five Golden Nugget-branded casinos in four states and is thought to have a market capitalization of around $6.3 billion. It detailed that Fertitta himself is worth approximately $4.5 billion and moreover owns the Houston Rockets franchise of the National Basketball Association (NBA).
Nevada firm eager to catch up:
The news service explained that Caesars Entertainment Corporation runs some 49 Caesars, Harrah’s and Horseshoe-branded casinos spread across the United States, Canada, Egypt, South Africa and the United Kingdom and recently emerged from bankruptcy due to debts that had amounted to around $25 billion…
Reuters reported that the Las Vegas-based operator’s arrears are now though to stand at about $9 billion with the firm keen to catch up with rivals including Wynn Resorts Limited and Las Vegas Sands Corporation while simultaneously paying down debts and improving profitability.
Full plate scenario:
However, the news service reported that Caesars Entertainment Corporation has recently been concentrating on the possibility of buying at least a part of Detroit-headquartered Jack Entertainment, which has a valuation of around $3 billion and holds interests in six casinos including Ohio’s Jack Cleveland Casino. In addition, July saw the Nevada giant further expand into Indiana after completing its $1.6 billion acquisition of local operator Centaur Holdings with its five properties.
Adding to the complexity of any future purchase, Reuters reported that hedge fund HG Vora Capital Management LLC has built up a 4.9% stake in Caesars Entertainment Corporation and hopes to persuade the firm to explore additional money-making options that could encompass divestitures or an outright sale.