Major Caesars Entertainment shareholder Carl Icahn wants to sell the casino company and the Board of Directors has loosely agreed to the possibility. However, the directors appear to not be quite as anxious as Icahn, and are putting up resistance to any possible deal. Many of the board’s members are holding out for more money.
According to Josh Kosman with the New York Post, Icahn would be willing to dump the company in the lap of Eldorado Resorts as quickly as possible if it were up to him. He has acknowledged that the offer made by Eldorado – $10.50 per share and only about 15% higher than its value – is not realistic, but he is much more open to a deal and would accept a lesser amount than what the board expects to receive.
Icahn, who owns 28.5% of Caesars after a series of recent stock purchases, hasn’t been shy about his position. The only reason the billionaire investor bought into the company was to try to force a sale and his stake has given him certainly weight to make that happen. He now has three seats on the 11-seat board and was responsible for bringing in CEO Tony Rodio, with whom he has worked previously at Tropicana Entertainment.
Caesars Board of Directors has been trying to hold out for $13 per share. Icahn purchased his stake at about $9 a share, and, although a $10.50 price point would be a nice return, he believes a better offer should be made. He also thinks $13 might be too high a goal and is reportedly becoming impatient with the time it’s taking to secure a deal.
Icahn had wanted Caesars to sell its assets well before he purchased his stake, arguing that it is the only logical course of action for the casino operator. He was right, as proven by the reaction of the stock market. Typically, when a company announces that it wants to be sold, its stock price increases as investors look to capitalize on the premium paid during the transaction. However, when news started surfacing that Caesars was seriously considering a sale, investors weren’t impressed and the stock price has remained relatively flat.
