Caesars’ Largest Stockholder Presses for Sale, Joining Icahn and Other Investors

Another major Caesars stockholder is pushing for the company’s sale to best serve and enhance shareholder value

Caesars Entertainment Corp.’s largest shareholder is urging the company to consider a sale, joining billionaire Carl Icahn and other investors who are pressing the gaming and hospitality giant to start a search for a buyer.

Los Angeles hedge fund Canyon Partners LLC said in a statement on Friday that its current view is that shareholder value “would be best served and enhanced by an open sale process.” The company holds nearly 70 million shares in Caesars, or more than 10%. It is the Las Vegas gaming and hospitality’s giant largest stockholder.

Caesars put its main operating unit in bankruptcy in 2015 to blunt the consequences of a $30.7 billion leveraged buyout gone wrong. The company emerged from a complex bankruptcy process in the fall of 2017 and embarked on a mission to secure better shareholder value, improved profitability, and continued growth.

The company released its full-year results for 2018 earlier this week, reporting revenue growth of 72.4% to $8.39 billion and net income of $303 million up from a loss of $368 million. The improved results were attributed to the inclusion of the results of Caesars’ main operating unit after its emergence from bankruptcy and of Centaur Holdings, which the Las Vegas powerhouse acquired last summer.

Caesars also said that in its full-year financial report that its CEO, Mark Frissora, who was due to leave his post this month, will stay at least up until the end of April. Given that many of Caesars’ investors are pressing for the company’s sale, an executive shakeup could be the last thing they want.

Icahn, Other Investors Push For Sale

News about Canyon Partners calling for the gaming and hospitality company’s sale arrive shortly after New York activist investor Carl Icahn confirmed previous reports that he has amassed a 9.78% stake in Caesars.

Mr. Icahn also said in a statement from earlier this week that Caesars’ stock is undervalued at present and that “shareholder value might be best served and enhanced by selling the company.” The Las Vegas giant said in a statement that it has engaged in discussions with the billionaire investor and that it will consider all his suggestions regarding its future.

Aside from Canyon Partners and Mr. Icahn, it also became known that Oppenheimer Funds, which owns 10 million shares, has told Caesars that it should not appoint a new CEO or board members until its management considers a sale.

Reports surfaced last summer that hedge fund HG Vora Capital Management had quietly built a 5% stake in Caesars and was pushing for a sale.

Bloomberg reported last weekend that Golden Nugget owner Tilman Fertitta has bought a nearly 1% stake in the Las Vegas casino operator. Mr. Fertitta made an offer last fall to merge his gaming and restaurant business with Caesars and become CEO of the combined entity. Caesars rejected his offer, but the businessman is reportedly still interested in a merger.

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