This week, executives from Fertitta Entertainment shared new details about the company’s acquisition of Caesars Entertainment, following preliminary licensing approval from the Nevada Gaming Control Board. Richard Liem, CFO, and Steven Scheinthal, general counsel, received unanimous backing from the board on Wednesday and will seek final approval from the Nevada Gaming Commission on July 23.
Liem and Scheinthal are longtime associates of billionaire Tilman Fertitta, who is currently serving as the U.S. ambassador to Italy and San Marino. Scheinthal has worked with Fertitta since 1988, while Liem joined in 1999. They emphasized that Fertitta is no longer involved in daily operations, with the company’s board now comprising the two of them and Fertitta’s wife, Paige.
Both executives have a strong history in Nevada's gaming industry, having been licensed since 2005, when Fertitta first acquired Golden Nugget Casinos. Their most recent appearance before the board occurred in 2023 when Golden Nugget took over the former Hard Rock Lake Tahoe.
In addition to discussing the transaction, board members expressed concerns regarding compliance, noting that Caesars had been fined $7.8 million last year for anti-money laundering violations. These violations were related to illegal bookmaker Mathew Bowyer, who has since been blacklisted from Nevada casinos. Scheinthal assured the board that Fertitta and Golden Nugget have always maintained compliance, stating, “We understand the importance of compliance… Everybody knows what the repercussions are in connection with not following the rules and regulations.”
On the topic of the Caesars acquisition, Scheinthal outlined the various challenges ahead, noting that the all-cash transaction is valued at $17.6 billion, which includes $5.7 billion in equity and $11.9 billion in assumed debt.
Priority items include completing antitrust filings and obtaining gaming license approvals across all jurisdictions where Caesars operates. Scheinthal mentioned that Fertitta plans to file the Hart-Scott-Rodino antitrust application with the Federal Trade Commission by July 13, which will initiate a 30-day waiting period. The company has categorized gaming license applications into two groups based on the expected processing times; the first batch is set to be submitted this week, with a second group to follow after 45 days.
“We think that probably will take nine to 10 months from today in order to get that approval,” he added.
As Caesars is publicly traded, it must file a proxy statement and obtain shareholder approval for the acquisition. Caesars held its annual meeting on June 9 and will release its second-quarter results on July 28, although there will not be an analyst call scheduled afterward.
Scheinthal also addressed the financing for the deal, noting Fertitta has a commitment letter from a group of banks but would prefer to find more favorable terms in the broader market. This strategy, however, carries risks amid high interest rates. The Federal Reserve maintained interest rates in June, dampening hopes for future cuts due to ongoing inflation and economic uncertainty stemming from the U.S.-Iran war.
“Our hope is that in the next few months, there will be a window of opportunity where the market will be hotter and [it’s] a more interest-rate-friendly environment where we can go raise the money and then just put it in an escrow account,” Scheinthal remarked.
The acquisition agreement includes a go-shop period that ends on July 11. Billionaire investor Carl Icahn, who previously led Caesars’ acquisition by Eldorado Resorts, is reportedly attempting to formalize a competing bid. His proposed bid is for $33 per share, surpassing the $31 per share deal with Fertitta. Icahn continues to hold two out of ten board seats at Caesars and is exploring a $5 billion debt financing package.
Despite this, sources indicate that the Caesars board favors the Fertitta deal due to its steady financing assurances.
“When we have the money, we get HSR clearance, shareholder approval, and approval for all the various gaming jurisdictions, then we’ll be in a position to close the transaction,” Scheinthal confirmed.
Lastly, the board members raised questions about Fertitta’s stake in rival Wynn Resorts, where he holds a 12% interest. Wynn's stock has fallen over 19% this year, with potential delays for its UAE resort amid ongoing regional conflicts. When asked about the timing for selling the stake, Scheinthal downplayed concerns, asserting, “We’re a passive investor in Wynn, and we like owning the Wynn stock, and so it’s our desire to keep owning the Wynn stock.”
