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LAS VEGAS – One of the Las Vegas Strip’s two largest casino operators will be sold to billionaire hospitality mogul Tilman Fertitta.
After months of reports of a sale in Sin City, Caesars Entertainment announced on May 28 that it had entered into a “definitive agreement” to be acquired by Fertitta Entertainment in an all-cash transaction valued at approximately $17.6 billion.
Caesars operates more than 50 properties across the United States, including eight on the Las Vegas Strip. These properties include the eponymous The Flamingo (one of the Strip’s founding resorts) and the Vanderpump Hotel.
Fertitta owns Landry’s Inc., a dining, entertainment and hospitality company that operates the Golden Nugget casino chain (including the original location on Fremont Street in downtown Las Vegas), the NBA’s Houston Rockets, the WNBA’s Houston Comets, and brands such as Bubba Gump Shrimp Company, Rainforest Café and Galveston Island Historic Pleasure Pier.
Fertitta has an estimated net worth of $11 billion, according to Forbes.
In announcing the acquisition, Fertitta Entertainment said it will combine its loyalty programs Caesars Rewards, Golden Nugget’s 24 Karat Select Club, and Landry’s Select Club to create “the industry-leading loyalty ecosystem in the hospitality industry.”
“The combined company will offer guests an even broader range of destinations and experiences, all connected by the Caesars Rewards loyalty network,” Caesars said in the sale announcement.
The “all-cash transaction” approved by Caesars’ board of directors includes Fertitta assuming $11.9 billion in Caesars’ debt and “new commitment debt financing arranged by a group of 10 banks.” The deal is subject to a shareholder vote and a “go-shop” period during which Caesars can consider other proposals and potential regulatory scrutiny.
TD Cowen analyst Lance Vitanza told Reuters the deal was “likely not to receive the necessary approvals” because Fertitta is the U.S. ambassador to Italy and San Marino and a longtime supporter of President Donald Trump.
When asked by USA TODAY whether it would seek to block the deal, Nevada Attorney General Aaron Ford’s office said it had “no comment.” USA TODAY also reached out to Nevada Governor Joe Lombardo for comment.
Caesars’ first merger in 10 years
This will be Caesars’ second merger with another company since 2020.
That year, Eldorado Resorts and then-Caesars Entertainment Corp. merged in a $17.3 billion deal after a long-term effort by the Carano family led to the gaming operator’s acquisition of the gaming giant, according to the USA TODAY Network’s Reno Gazette Journal. The deal leaves Caesars Entertainment with $8.8 billion in debt amid the coronavirus pandemic.
Caesars executives, including president and chief operating officer Anthony Carano and chief executive officer Tom League, as well as real estate-level management and human resources, will continue in their roles under Fertitta’s ownership, according to the sale announcement.
The Carano family plans to convert 5% of Cesar’s outstanding shares into Fertitta Entertainment stock and take the company private upon completion of the sale.
Campaigns and unions respond
Washoe County Commissioner Alexis Hill, who is running against Mr. Ford in the Democratic gubernatorial primary, said in a statement first provided to USA TODAY that it would be bad for the state to have “one of Donald Trump’s friends further controlling this industry.”
“Billionaires like Tilman Fertitta and his huge corporations must start paying their fair share of taxes so that Nevadans don’t receive them every day,” she added. “Casino and hospitality workers across the state are already working in dangerous conditions, with reduced hours, no living wage, and no access to child care.”
In a statement, the leading culinary union said it had “developed a strong relationship” with both parties and would “discuss the full implications of this acquisition.”
“The Culinary Union remains committed to ensuring that workers’ rights are respected, jobs are protected and union contracts are fully enforced,” the union said.
USA TODAY has reached out to the Ford and Lombardo camps as well as other major unions in Las Vegas for comment.
Contributor: Jason Hildago, Reno Gazette Journal, Reuters
