Tilman Fertitta's bid to take private Caesars Entertainment has emerged as a significant focus in the casino industry this year. However, as the go-shop window nears its conclusion on July 11, fellow billionaire Carl Icahn is reportedly contemplating a last-minute offer for the troubled operator.
Bloomberg reported this week that the investment bank Jefferies Financial is exploring interest in a $5 billion debt financing package to support a $33-per-share offer, which would exceed Fertitta's offer of $31 per share and facilitate a private acquisition of Caesars. Fertitta's proposal is an all-cash deal totaling approximately $17.6 billion, comprised of $5.7 billion in equity and nearly $12 billion in assumed debt.
Icahn's intended approach is viewed as a complex liability management exercise. Typically, such exercises aim to restructure debt to avoid bankruptcy. Although controversial, they have gained traction in the current high-interest-rate environment. Following reports of Icahn's potential bid, Caesars' shares experienced increased trading volume but ultimately remained stable at around $30.
On Wednesday, CNBC's David Faber provided a sobering update on Icahn's prospects. "Will [Icahn] get to a finish line that’s acceptable to the board of directors? From what I’m hearing, it’s a tough slog. They favor the Tilman deal. There is firm financing there. The debt package kind of travels with the management team, meaning if the management team were to leave, you would have to refinance a lot more debt," Faber explained.
Icahn's interest appears earnest, but time constraints and his past relationship with Caesars pose significant challenges. He gradually amassed a controlling stake in Caesars beginning in 2019 and led the company's acquisition by Eldorado Resorts in 2020 before selling off his holdings. Caesars' current management includes team members from Eldorado, such as the Carano family and CEO Tom Reeg.
Looking back, the Eldorado acquisition was detrimental to Caesars shareholders, with the stock plunging almost 70% over the last five years. It dipped below $20 in February before rallying to around $29 due to takeover speculation. Whether investors would support another Icahn-led takeover remains uncertain.
Nonetheless, Icahn's influence continues to resonate. The 90-year-old billionaire began increasing his stake in Caesars in early 2025, leading to the appointment of two board directors from Icahn Enterprises: CFO Ted Papapostolou and general counsel Jesse Lynn. His interest initially centered on the potential spin-off of Caesars' digital business, which the company was open to discussing.
"Icahn wants to be involved in the conversation and I welcome him to join us,” Reeg stated at last year’s East Coast Gaming Congress. “We have a great relationship."
On Wednesday, Caesars disclosed plans to reduce its board from 11 to 10 members. However, this shift may hinder Icahn's efforts rather than assist them. Courtney Mather, the chief investment officer at Vision One and a board member since 2019, announced his resignation effective July 6. Mather previously worked as a managing director for Icahn Enterprises from 2014 to 2020. The SEC filing regarding his departure indicated that it was not due to disagreements with Caesars.
As Icahn works to solidify his bid, Fertitta's plans are advancing. This Thursday, CFO Richard Liem and senior vice president Steven Scheinthal from Fertitta Entertainment will undergo suitability hearings before the Nevada Gaming Control Board (NGCB). These hearings mark the initial phase of what could be a lengthy regulatory review if the deal is approved.
Fertitta currently operates Golden Nugget Casinos, which competes with Caesars in several jurisdictions, including two in Nevada: Laughlin and Lake Tahoe. The prior acquisition by Eldorado faced similar antitrust scrutiny, resulting in regulatory demands for divestments, and a similar review is anticipated for Fertitta's acquisition.
The NGCB had previously refrained from commenting on Fertitta's acquisition but stated it will await federal decisions before making state-level assessments.
On Wednesday, Caesars' shares closed at $29.82, reflecting a slight decline for the day. The stock was trading around $28 prior to Caesars announcing its agreement with Fertitta on May 28 for the acquisition.
