Caesars Shareholders Approve $17.6 Billion Fertitta Takeover
Shareholders have backed the proposed take-private deal, although FTC scrutiny and financing remain among the hurdles before the transaction can close.
Caesars Entertainment shareholders have approved the company’s proposed $17.6 billion takeover by Fertitta Entertainment, clearing a significant hurdle for the transaction as it continues through the US regulatory process.
Approximately 65% of eligible Caesars shareholders voted in favour of the deal at a special meeting held on 22 September at the Eldorado Resort and Casino in Reno, Nevada.
The transaction, announced in May, would take Caesars private at $31 per share. It followed a period in which Fertitta Entertainment and investor Carl Icahn had competed for control of the casino operator.
Under the proposed deal, the Carano family, associated with Eldorado Resorts, will retain its equity interest, while Caesars’ existing senior management team is expected to remain in place.
FTC Requests Further Information
Shareholder approval does not complete the transaction, with the proposed acquisition still requiring regulatory clearance.
One of the most significant outstanding matters is the Federal Trade Commission’s antitrust review. The parties submitted their initial Hart-Scott-Rodino filings in July, before the FTC issued a second request for additional information on 14 September.
The request extends the review process, with the statutory waiting period continuing for 30 days after both parties have substantially complied. Caesars has not disclosed the specific information requested by the regulator.
Caesars and Fertitta Entertainment’s Golden Nugget operations overlap in several US casino markets, including Las Vegas, Lake Tahoe and Laughlin in Nevada.
Any requirement for asset sales remains uncertain at this stage. However, the FTC has previously required casino divestments where it identified competition concerns, including during Eldorado Resorts’ acquisition of Caesars in 2020.
Caesars Responds To Shareholder Demand
The shareholder vote also followed a demand submitted to Caesars on 15 September seeking access to certain company books and records and raising questions over disclosures concerning legal representation for the merger.
Caesars described the claims as “without merit” and “immaterial”, but subsequently provided additional information regarding law firm Latham & Watkins in an SEC filing.
Latham is acting as Caesars’ legal counsel on the transaction while also representing Fertitta Entertainment founder Tilman Fertitta on matters unrelated to Caesars or the merger.
Caesars said the fees paid by Fertitta personally to the law firm were “significantly less” than those the operator expects to pay Latham in connection with the transaction.
Financing Remains Another Key Requirement
Financing for the takeover also remains part of the process ahead of completion.
Fertitta has agreed a $6.6 billion financing package comprising a $2 billion revolving credit facility and $4.6 billion in term and bridge loans.
During a presentation to Nevada regulators in July, Fertitta indicated it was waiting for more favourable conditions in the debt market before raising the funds.
The wider interest rate environment has since remained challenging, with the US Federal Reserve raising rates in September for the first time in three years.
Caesars shares closed at $29.61 on Wednesday, remaining below Fertitta’s agreed $31-per-share offer price. The offer represented a 49% premium to Caesars’ closing price in February when Fertitta initially made its approach.
With shareholders now having approved the acquisition, attention turns to the FTC review, financing arrangements and remaining regulatory requirements before the proposed take-private transaction can be completed.
