Carl Icahn has upped his stake in Caesars to become the Las Vegas casino operator’s largest shareholder; sale seems likelier by the day
Entities related to Carl Icahn purchased earlier this week 38.9 million shares of Caesars Entertainment Corp.
Mr. Icahn said Friday in a filing with the US Securities and Exchange Commission that he now owns 15.53% in company stock, up from the nearly 10% stake he had amassed over the past few months.
News about the 83-year-old businessman upping his holding in the Las Vegas gaming and hospitality powerhouse came on the heels of last week’s announcement that Caesars has agreed to give Mr. Icahn board representation. Keith Cozza, CEO of Icahn Enterprises, James Nelson, and Courtney Mather were named by the activist investor as the new members of Caesars’ 12-person Board of Directors, replacing a trio of now former members.
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In a separate round of news, it emerged on Friday that the casino operator’s owners – private equity giants Apollo Global Management LLC and TPG Capital – have slashed their stake. The two companies have sold nearly 36.7 million shares of Caesars, according to a Friday regulatory filing. Their holding company, Hamlet Holdings, now owns about 5.7% of the casino owner’s stock.
Apollo and TPG acquired Caesars in a leveraged buyout in 2008. The deal ballooned the company’s debt to more than $25 billion. Caesars saw no other escape route but to put its main operating unit into a Chapter 11 bankruptcy protection in 2015.
The casino operator emerged from bankruptcy in the fall of 2017 and has been looking to assure investors that its prospects are favorable.
Icahn Bets on Sale
Mr. Icahn has been pressing Caesars to sell itself or merge with another entity since news that he has amassed a stake in the company first emerged earlier this year. In a statement announcing the appointment of the three new board members named by him, the businessman said last week that he still believed “the best path forward for Caesars requires a strategic process to sell or merge the company.”
The billionaire investor went on that the move would help the casino operator to “further develop its already strong regional presence.”
Mr. Icahn has a long record of pressuring various businesses into selling themselves, and now as he is Caesars’ largest shareholder, a sale of the company seems likelier by the day. It became known last fall that Texas businessman Tilman Fertitta had approached Caesars with an offer to merge it with his casino and hospitality empire Landry’s, the owner of the Golden Nugget chain of casinos.
Caesars declined that offer, but news emerged last month that Mr. Fertitta has acquired a stake in the company and is still interested in combining his business with that of its much larger rival. It is unknown whether Mr.
Icahn would bless a marriage between Golden Nugget and Caesars.
The activist investor now needs to obtain a gaming license in Nevada since his holding in the gaming and hospitality powerhouse exceeds the 10% ownership threshold. It is yet unknown when the businessman will appear before gaming regulators, but given his previous experience in owning casinos in Las Vegas, he is not likely to hit roadblocks throughout the licensing process.
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