Fertitta Entertainment Inc. has entered into a definitive agreement to acquire Caesars Entertainment Inc. in an all-cash transaction valued at approximately $17.6 billion, including the assumption of approximately $11.9 billion of Caesars’ outstanding debt.
Under the terms of the agreement, Caesars’ shareholders will receive $31 in cash for each outstanding Caesars’ share. The consideration represents a 49% premium over Caesars’ unaffected share price as of Feb. 25 (the last trading day before rumors of a potential transaction) and a 46% premium over the unaffected 30-day volume-weighted average price (VWAP) as of the same date.
The agreement brings together two of the world’s premier hospitality and gaming companies. Caesars is one of the leading casino entertainment companies in the U.S. It’s a brand with a significant presence of eight locations on the Las Vegas Strip: Caesars Palace, Harrah’s, Paris Las Vegas, Planet Hollywood, Horseshoe, The LINQ Hotel, Flamingo and The Vanderpump Hotel. Fertitta Entertainment’s hospitality and entertainment businesses include Golden Nugget Hotels & Casinos and Landry’s.
Fertitta Entertainment, alongside Caesars Entertainment, will create a combined company built on a shared commitment to operational excellence, world-class customer service and disciplined growth, according to both firms.
On a combined basis, guests will have access to a diversified array of offerings, including 60 domestic casino resorts and gaming facilities, spanning Las Vegas Strip destinations and regional markets across the country; online gaming including sports betting, iCasino and Poker, through Caesars’ digital platform; retail sports betting at more than 200 third-party locations through the William Hill brand; and more than 550 Fertitta Entertainment outlets, including more than 450 Landry’s full-service restaurants.
By combining the two companies’ loyalty programs—Caesars Rewards, Golden Nugget’s 24 Karat Select Club, and Landry’s Select Club—Fertitta Entertainment is building what it believes will be “an industry-leading loyalty ecosystem in the hospitality industry.”
The leadership teams of both companies are expected to remain in their current roles and continue to lead the combined companies’ operations.
Transaction details
The proposed transaction is not subject to a financing condition. The transaction will be financed through a combination of equity contributed by Fertitta Entertainment, assumed Caesars’ debt and new committed debt financing arranged by a group consisting of 10 banks.
The transaction is subject to the approval of Caesars Entertainment shareholders and the satisfaction of customary closing conditions, including applicable regulatory approvals. Upon completion of the transaction, shares of Caesars Entertainment common stock will no longer be listed on NASDAQ.
The agreement includes a “go-shop” period through approximately July 11, during which time Caesars and its financial and legal advisors may solicit, consider and negotiate alternative acquisition proposals from third parties. Prior to a vote of the shareholders of Caesars, the Caesars board of directors will have the right to cause the company to terminate the agreement to enter into an alternative transaction providing for a superior proposal, subject to the terms and conditions of the definitive agreement. There can be no assurance that this process will or will not result in a superior proposal. Caesars does not intend to disclose updates on this process unless and until it determines that such disclosure is appropriate or required.
Morgan Stanley & Co LLC and Goldman Sachs & Co. LLC are serving as financial advisors to Fertitta Entertainment and White & Case LLP is serving as legal counsel. PJT Partners is serving as exclusive financial advisor, Latham & Watkins LLP is serving as legal counsel and Skadden, Arps, Slate, Meagher & Flom LLP is serving as antitrust counsel to Caesars Entertainment.
