May 28 (Reuters) – Caesars Entertainment said on Thursday it will be bought out by Tilman Fertitta-owned firm in a $17.6 billion deal, as the hospitality billionaire looks to expand his leisure empire.
The deal, which will take one of the Las Vegas Strip’s most prized casino operators private, includes about $11.9 billion in assumed debt, the company said.
Shares of the casino operator rose 2.5% in premarket trading and have gained about 16% since the deal was first reported in February.
Fertitta, the U.S. ambassador to Italy and San Marino and owner of Fertitta Entertainment, offered $31 per share — a nearly 50% premium to the stock’s closing price before the deal was first reported.
Top executives, including CEO Tom Reeg and CFO Bret Yunker, are expected to stay on. The deal includes a “go-shop” period through July 11, allowing Caesars to consider and negotiate alternative proposals.
Fertitta Entertainment, which owns the Golden Nugget Hotel and Casinos and basketball team Houston Rockets, had approached Caesars in 2018 about merging it with his own gaming empire, Reuters had reported.
Through his restaurant and hospitality company, Fertitta owns more than 600 properties in 36 states and over 15 countries, including casual dining brands such as Rainforest Café and Bubba Gump Shrimp.
Caesars combined with smaller rival Eldorado Resorts in 2020 to form one of the biggest casino and entertainment companies in the United States — a deal set in motion after activist investor and billionaire Carl Icahn built a stake a year before and pushed the company to pursue a sale.
Caesars controls more than 50 casinos across North America, including Caesars Palace, Harrah’s and Eldorado. It also runs a retail and online sports-betting app.
The company faces mounting pressure as fewer visitors to Las Vegas — its core market — dent revenue at resorts, hotels and casinos, while its online betting arm trails larger rivals like FanDuel and DraftKings and faces growing competition from prediction markets.
(Reporting by Anshuman Tripathy in Bengaluru; Editing by Shilpi Majumdar and Vijay Kishore)
