Carl Icahn Returns to Gambling World Via Caesars Investment

Billionaire activist investor, Carl Icahn, has reportedly built big stakes in Caesars Entertainment, resulting in company’s stock soaring by 9.01% as soon as the news was made public.

This investment marks Icahn’s return to the ranks of gambling industry, as last year he successfully negotiated the selling of Tropicana Entertainment. He also retained a certain degree of ownership of Trump Entertainment Resorts.

The rate at which he is buying Caesars’ shares made Wall Street stock markets sit up and take notice. Early last Friday, as the news broke out, Caesars’ shares made a notable jump after plummeting by embarrassing 46% in 2018.

Stirring Excitement and High Hopes

Last year, another immensely wealthy investor approached Caesars with the same intent…

…NBA’s Houston Rockets franchise owner and the man behind Landry’s – company that owns Golden Nugget Casinos, Ranforest Cafe and Morton’s steakhouses – Tilman Fertitta offered $13 per share in cash and stock to Caesars. Had this bid been accepted, he would have become CEO of the new-found company.

In fact, his offer was replied to with Caesars statement:

“The Board considered the proposal, in consultation with its legal and financial advisors, and determined that it is not consistent with the Company’s plans to create and enhance shareholder value over the long term. The Board has informed Golden Nugget of its decision.”

Carl Icahn’s business ventures were more successful – he sold his stake in Tropicana for $1.85 billion to Eldorado Resorts.

A year prior to that, another of his former properties – Trump Taj Mahal in Atlantic City – was sold to Hard Rock International who renovated it into the Casino & Resort venue.

While the investor hasn’t yet made a public statement regarding these claims of Caesars stakes, sources close to the situation indicate that the level of his investments was big enough to make sure he has a significant influence on the operator business.

Is Caesars Back on Track?

After last year’s calamitous drop in stock value (from $13 to $6.80 per share), Las Vegas-based operator could be getting a lifeline with this sudden investment – just in time before some crucial events of 2019 take place. This involves the decision on acquiring a valid Japanese gambling license – which Caesars is very hopeful for.

In August, which was a month of big crisis for Macau whose poor results saw numerous investors back down and abandon Asia’s gambling hub, shares were temporarily halted. During this particular session, their stocks took a 20% nosedive!

Saving them from a complete disaster was the unexpected comeback in December which saw Macau’s GGR rise by 16.6%.

February will be the month of current CEO’s Mark Frissora resignation – he has announced his departure in November but did not cite any specific reasons for his stepping down from this role.

Source:

“Carl Icahn builds stake in Caesars Entertainment: Sources”, David Faber, cnbc.com, January 11th, 2019.