Caesars Entertainment accepted the offer to be acquired by the Fertitta Entertainment. The overall deal will be of $17.6bn with Fertitta paying $5.7 billion and take on close to $12 billion in debt from Caesars. As part of the agreement, Caesars can seek competing bids through July 11.
Investors in Caesars are being offered $31 per share, which is a premium of 49% above what Caesars shares were trading at before the news of a possible merger broke in February. Since news of a merger was first announced, Caesars shares have already increased 15% and were up almost 2% in pre-market trading on Thursday.
Caesars has been under pressure due to fewer visitors to Las Vegas impacting revenues from casinos, hotels, and resorts. Additionally, Caesars’ online gaming business lags behind other competitors such as DraftKings and FanDuel, and now they are beginning to face competition with predictive betting sites.
The $31 purchase price was offered by U.S. Ambassador to Italy and San Marino Tilman Fertitta, this price represents an almost 50% premium over the closing price of Caesars stock on the day prior to the announcement of the merger and about 8% higher than the closing price of Caesars stock Wednesday.
Following the merger, Caesars’ senior executives, Tom Reeg (CEO) and Bret Yunker (CFO), are expected to continue in their respective roles. Additionally, the merger agreement will include a “go-shop” period (ending on July 11) during which Caesars can investigate competing offers.
