Fertitta Entertainment's executives provided new details this week regarding their acquisition of Caesars Entertainment as they received preliminary licensing approval from the Nevada Gaming Control Board. Richard Liem, the company's CFO, and Steven Scheinthal, the general counsel, were unanimously approved on Wednesday and will present before the Nevada Gaming Commission for final approval on July 23.
Both have long-standing ties to 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 the team in 1999. They emphasized that Fertitta is not involved in daily operations, with them and Fertitta's wife, Paige, comprising the company's board during his absence.
Liem and Scheinthal are seasoned figures in Nevada’s gaming sector, having been licensed in the state since Fertitta's acquisition of Golden Nugget Casinos in 2005. Their last appearance before the board was in 2023 when Golden Nugget took control of the former Hard Rock Lake Tahoe.
During the meeting, discussions included the transaction details but focused first on compliance. The board noted Caesars' $7.8 million fine last year for anti-money laundering violations involving illegal bookmaker Mathew Bowyer, who has since been banned from all casinos in Nevada. Scheinthal reassured the board that Fertitta and Golden Nugget have "never had an issue" with compliance integrity, stating, "We understand the importance of compliance. Everybody knows what the repercussions are in connection with not following the rules and regulations."
Regarding the acquisition, Scheinthal detailed the various steps necessary for completion, noting the process could take a year or longer. The all-cash deal is valued at $17.6 billion, including $5.7 billion in equity and $11.9 billion in assumed debt.
He indicated that the top priorities are antitrust filings and gaming license approvals in all jurisdictions where Caesars operates. Fertitta plans to submit a Hart-Scott-Rodino antitrust application to the Federal Trade Commission by July 13, which will begin a 30-day waiting period. The gaming license applications are being divided into two groups based on how long approval is expected to take, with the initial round set to be completed this week and 45 days allocated for the remaining applications.
Scheinthal estimated that securing the necessary approvals could take nine to ten months from now.
As Caesars is publicly traded, it also needs to file a proxy statement and obtain shareholder approval. The company held its annual meeting on June 9 and is set to announce its second-quarter results on July 28, although it won’t hold an analyst call.
Another important consideration discussed was financing. Scheinthal mentioned that while Fertitta has a commitment from a banking syndicate to finance the deal, they prefer to find more favorable terms in the market. This approach carries risk given the current high interest rate environment, as the U.S. Federal Reserve has maintained interest rates steady amid rising inflation and economic repercussions from ongoing conflicts.
Scheinthal expressed hope for better terms in the coming months: "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."
The agreement contains a go-shop provision through July 11, enabling Carl Icahn, the billionaire investor who led Caesars’ previous acquisition by Eldorado Resorts, to attempt to submit a competing bid. Reports suggest Icahn is preparing a $33 per share bid, which surpasses the $31 per share agreement with Fertitta. Icahn still holds two of the ten seats on Caesars’ board and is exploring interest in a $5 billion debt financing package.
However, the Caesars board reportedly favors the Fertitta arrangement due to its "firm" financing.
"When we have the money, we get HSR clearance, shareholder approval, approval for all the various gaming jurisdictions, then we’ll be in a position to close the transaction," Scheinthal stated.
The board members also inquired about Fertitta’s stake in Wynn Resorts, where he holds the largest share, amounting to 12%. Wynn has dropped over 19% this year and is facing delays for its anticipated UAE resort due to regional tensions. When questioned about the potential sale of this stake, Scheinthal expressed surprise and asserted, "There’s no reason to believe there are any regulatory issues with passive ownership. 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."
