Caesars Entertainment shareholders have approved the company’s merger with Fertitta Gaming in a transaction valued at more than $17bn. The vote clears a key corporate step for the deal, under which shareholders are set to receive $31 per share when the transaction is completed.
The proposal received 133 million votes in favour. Four million votes were cast against it, while a further five million shareholders abstained. About 70% of Caesars Entertainment’s outstanding shareholders participated in the vote.
Fertitta’s proposed acquisition
Speculation that Tilman Fertitta, the billionaire owner of Fertitta Entertainment, was considering a takeover of Caesars first emerged in February. The companies confirmed three months later that they had reached a “definitive agreement”.
Under the proposed structure, Fertitta will pay $5.7bn and assume close to $12bn in Caesars debt. Financing will combine equity from Fertitta Entertainment, the assumed Caesars debt and newly committed debt financing arranged by a group of 10 banks.
Fertitta previously described the transaction as bringing together “two iconic and highly complementary platforms”.
The acquisition would combine Fertitta’s existing Golden Nugget Casino and Landry’s businesses with Caesars’ portfolio of more than 50 casinos. That portfolio includes eight properties in Las Vegas. Fertitta would also take on Caesars’ online sports betting and iGaming platforms.
Caesars Chief Executive Officer Tom Reeg, Chief Financial Officer Bret Yunker and President and Chief Operating Officer Anthony Carano are expected to remain in their positions in the combined company. Other members of the corporate and property-level management teams will also stay in place.
The Carano family, which held a 5% stake in Caesars, has agreed to roll part of its equity interests into Fertitta Entertainment.
Caesars’ recent performance
The transaction comes after a difficult period for Caesars, which has faced a downturn in tourism to Las Vegas.
The company’s final results as a publicly listed business for the second quarter were mixed. Total net revenue rose 3% year over year to $3bn, but adjusted EBITDA declined 3.7% to $920m.
The lower profitability was linked to reduced revenue from Caesars’ Las Vegas segment and weaker profitability at Caesars Digital. The digital division’s results were affected by increased spending on customer acquisition and marketing.
