Caesars Entertainment, Inc. has agreed to be acquired by Fertitta Entertainment, Inc. in an all-cash transaction valued at approximately $17.6 billion. The valuation includes the assumption of about $11.9 billion of Caesars’ outstanding debt. Under the terms announced, Caesars shareholders are expected to receive $31 per share, representing a 49% premium to the company’s common stock price on February 25, the last trading day before market rumors of a potential deal emerged.
Following the transaction, the combined company is expected to span a broad national hospitality and entertainment footprint. According to Caesars, the platform will include roughly 60 casino resort properties across the United States together with more than 600 entertainment outlets operated by Fertitta. All of these locations are expected to be connected through the Caesars Rewards loyalty program, which will remain the unifying customer-facing network for the enlarged portfolio.
Caesars stated that its current senior leadership team is expected to continue in place after the acquisition closes. Tom Reeg will remain chief executive officer, Bret Yunker will continue as chief financial officer and Anthony Carano will stay on as president and chief operating officer, with each executive anticipated to lead Caesars Entertainment’s operations within the combined enterprise. This continuity is positioned as a way to maintain operational focus during the integration process.
The agreement includes a go-shop provision that runs through July 11. During this period, Caesars and its financial and legal advisors are permitted to solicit, evaluate and engage in negotiations regarding alternative acquisition proposals from other potential buyers. The outcome of any such proposals, if received, would be subject to the terms of the existing merger agreement.
Completion of the deal is subject to approval by Caesars’ shareholders. The companies indicated that the transaction is not subject to a financing condition, reflecting the presence of committed capital to support the acquisition. The funding structure is expected to comprise equity contributed by Fertitta Entertainment, the assumption of Caesars’ existing debt and new committed debt financing arranged by a syndicate of 10 banks.
Multiple advisory firms are involved in the transaction. PJT Partners is serving as exclusive financial advisor to Caesars Entertainment. Latham & Watkins LLP has been engaged as legal counsel to Caesars, while Skadden, Arps, Slate, Meagher & Flom LLP is providing antitrust counsel. Freshfields is acting as counsel to the Carano family, which holds approximately 5% of Caesars’ outstanding stock. On the buy-side, Morgan Stanley and Goldman Sachs are serving as financial advisors to Fertitta Entertainment, and White & Case LLP is acting as its legal counsel.
