MGM and Caesars merger rumours continue
Activist hedge funds are reportedly pushing the deal as stock from both companies is down 25% and 15% year to date.
US.- The casino industry could be shooked if rumours about a potential MGM and Caesars Entertainment merger end up being true. As activist hedge funds push for the deal to be completed, MGM has reportedly hired investment bank Morgan Stanley and law firm Weil, Gotshal & Manges to study the massive agreement.
Not only have both MGM and Caesars stock dropped 15% and 25% respectively, but also the latter’s CEO Mark Frissora has announced his resignation as of February 8. “Everyone knows that without a CEO, Caesars is in play,” a New York Post source stated.
Should a merger finally be completed, the newly formed corporation would own nearly 50% the hotel rooms in Las Vegas and Atlantic City and may raise both state’s regulators concerns. It would combine MGM’s enterprise value, equity plus debt, of US$30 billion and Caesars’ US$22 billion.
“I think the next three to four months will be fascinating,” a second NY Post gaming source close to the situation said.
Recently, Tilman Fertitta also approached Caesars Entertainment Corp to discuss a potential merger. The businessman owns the Golden Nugget Casinos and the Houston Rockets NBA team, among other companies, and wanted his assets on the casinos bought by Caesars. However, the board rejected his proposal.
