Carl Icahn ups stake in Caesars, wants a role in the selection of a new CEO of the Las Vegas casino and hospitality powerhouse
Days after it became known that New York billionaire investor Carl Icahn has become the largest stockholder of Las Vegas casino giant Caesars Entertainment Corp ., the businessman announced that he has upped his stake.
In a filing with the US Securities and Exchange Commission, Mr. Icahn said Monday that hedge fund owned by him bought 15 million shares of the gaming and hospitality company over the weekend for $126.7 million. After the latest purchase, the activist investor now owns 17.75% in Caesars stock.
Mr. Icahn has built his stake in the company within the past 2 month. Reports about his interest in the Las Vegas casino operator first surfaced in mid-January.
News about the billionaire upping his Caesars stock arrived days after the company’s owners- Apollo Global Management LLC and TPG Capital- halved their own stake. The two private equity giants sold nearly 36.7 million shares of the casino powerhouse. Apollo and TPG bought Caesars in a leveraged buyout back in 2008.
The transaction ballooned the company’s indebtednes to over $25 billion, which it struggled with for seven years before being forced to put its main operating division into Chapter 11 insolvency protection. The company emerged from lengthy and complex insolvency proceedings in the fall of 2017. It long-term debt currently stands at around$ 9 billion.
Icahn Presses for Sale, Wants a Say in New CEO Appointment
News about Mr. Icahn’s interest in Caesars immediately inspired commentaries that the businessman could press the company to sell itself. The businessman speedily confirmed those suggestions, saying in a recent regulatory filing that he believed “the best path forward for Caesars requires a strategic process to sell or merge the company.”
Earlier this month, Caesars has agreed to replace three members of its Board of Directors with people named by Mr. Icahn. Icahn Enterprises CEO Keith Cozza as well as James Nelson and Courtney Mather were appointed by the activist investor.
Now, as Mr. Icahn is the company’s largest shareholder and a quarter of Caesars’ board is loyal to him, the businessman will certainly use his increased influence to press harder for a sale. And it should be noted that he has a long record of successfully pressuring industries into selling themselves and reaping the financial benefits of such bargains.
It was also understood that Mr. Icahn wanted a role in the selection process of a new Caesars CEO. The company’s current chief- Mark Frissora, announced last year plans to step down in February. It later on became known that he would stay with Caesars at least until April.
Mr. Icahn was allegedly proposed Affinity Gaming CEO Anthony Rodio as Mr. Frissora’s replacement. The New York activist investor has also pointed out that he believes a person with experience in the gambling industry should succeed Caesars’ current CEO.
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