MGM And Caesars In Supposed Merger Talks

Lately, the rumors have started to circulate in business and iGaming spheres alike, that a potential deal of the century, if realized, could send shockwaves across the entire galaxy. It is from unofficial sources that we’ve learned about possible talks between the two biggest Las Vegas casino corporations, MGM Resorts and Caesars Entertainment.

Wondering what follows? Why, the merger of the two companies, of course!

XXI Century's Biggest Deal?

Potential merging of these two leviathans would create a $20+ billion casino and resort monster unlike anything the world of gambling has ever seen!

The new mega-company would thus take hold of approximately half Las Vegas and Atlantic City markets. However, these claims are made by unknown sources close to New York Times, who is reporting on the matter.

NY Times reports that MGM has hired Morgan Stanley bank and Weil, Gotshal & Manges law firm to begin gathering data and necessary info for the realization of this project, even though no initial offer has been made.

Investors within Caesars, who own 25% of the stakes, have been pushing for company's sale, according to the same sources. Apparently, Caesars has already rejected the acquisition offer from businessman Tilman Fertitta, Golden Nugget owner. The company has stated, during the Q3 financial results conference, that Fertitta's offer was “not consistent with the company's plans to create and enhance shareholder value”.

The Mysterious Resignation of Mr. Frissora

These rumors have started to appear around the same time Caesars' board of directors announced that Mark Frissora, who has presided over one of the most prosperous periods in company's history, has decided to step down from his Presidential and CEO roles in February next year.

Frissora even gave a brief statement thanking his former employers and admitting it is time to move on (not sure on what, exactly), hinting at nothing suspicious behind his alleged resignation.

However, certain sources like New York post believe that Frissora was actually forced into resignation since he was opposing the sale of the company, getting himself into a direct collision of opinions with investors.

At this point, Caesar's biggest shareholders are Apollo Global Management and TPG Global, and the sources claim they wholeheartedly support the sale of Caesars.

However certain the sale of Caesars may seem, the definitive buyer may not be MGM Resorts – in fact, it is said that some of the potential suitors include Wynn Resorts and Genting Group from Malaysia. Also, several private equity firms, including The Blackstone Group that already purchased Spanish gambling company Cirsa this year, may still be in the game.

The merger of Caesars and MGM would certainly be the biggest piece of business news the gambling world has seen in years. What do you think about the potential outcome of this? Is it “yay” or “nay” from you? Send us your thoughts below!

Source:

“MGM Casino exploring Caesars merger: sources”, John Kosman, nypost.com, November 5th, 2018.