Former Tropicana Entertainment CEO Tony Rodio has emerged as a potential new CEO for Caesars Entertainment, according to a report late Sunday from Reuters.
Caesars is in talks to offer corporate raider Carl Icahn a role in selecting its new CEO as part of an agreement that would also give the billionaire investor board seats, people familiar with the matter said.
Rodio oversaw Icahn’s seven-casino company that was sold last year to regional casino operator Eldorado Resorts and real estate investment trust Gaming and Leisure Properties for $1.8 billion. He spent more than three decades in Atlantic City, helping to lead the Boardwalk gaming community’s growth and a subsequent resurgence after new competition sent the market into a prolonged nosedive.
In October, Rodio was named CEO of Las Vegas-based regional casino operator Affinity Gaming.
The negotiations between Icahn and Caesars came after the corporate raider disclosed a 9.8 percent stake in Caesars last week and said he wanted representation on the gaming company’s board.
Icahn also asked Caesars to launch a process to explore a sale. The company responded on Wednesday that all the deals it had explored thus far undervalued it and did not create enough value for shareholders but noted that it will continue to evaluate strategic alternatives presented to it.
On Friday, another top investor in Caesars, hedge fund Canyon Partners LLC, also called on the company to be sold.
“Canyon’s current view is that shareholder value would be best served and enhanced by an open sale process that will be presented to shareholders for a vote thereon,” Canyon said in a statement.
According to Reuters, Icahn proposed Rodio for the CEO slot.
Current Caesars CEO Mark Frissora, who has been with Caesars since 2015, announced his intention in November to step down. However, when the search for a new CEO stalled, Frissora agreed to stay on the job through April.
Icahn, in a Securities and Exchange Commission filing last week, told the company to abandon the CEO pursuit.
On last week’s quarterly earnings conference call, Frissora said Caesars “was far along in the (search) process” and has “a good list” of potential candidates.
“We’re far enough along to insure a seamless transition with me,” he said.
Frissora said the company’s board was looking for a CEO candidate with experience in hospitality and gaming who was a “seasoned executive” who has “managed through turbulent times and adversity.” He added, “We feel like the Caesars brand is attracting a good talent pool.”
Rodio has more three decades of gaming industry experience in regional markets. He served as president and CEO of Tropicana Entertainment – and a member of the company’s board – since 2011.
Rodio, who also served in various roles with Hollywood Casino Corp. and Harrah’s Entertainment, oversaw improvements in Tropicana Entertainment where revenue grew more that 50 percent. He also oversaw the company’s regional market expansion outside Atlantic City.
According to Reuters, Affinity Gaming declined comment.
Caesars, which has some 40 casino properties in 13 states and owns the World Series of Poker, exited a 30-month bankruptcy that shed more than $16 billion of debt from its books in October 2017.
According to Reuters, Caesars is open to giving Icahn board representation, although the number of board seats and the names and titles of those filling them are still under negotiation. Icahn could receive a significant minority of the board’s 12 seats as part of any deal, the sources said.
The deadline for Icahn to nominate his own board directors expires Friday If an agreement between Caesars and Icahn is not reached this week, the company may extend the nomination deadline or continue to negotiate with Icahn even if he files a board slate for election, sources told Reuters.
Caesars said on Thursday that it expected “to continue a constructive dialogue” with Icahn. Clinching a deal with Icahn as early as the end of this week would allow the company to avoid a proxy contest over the composition of its board.
Shares of Caesars closed Monday at $8.96 on the Nasdaq, down 9 cents or 0.99 percent.
(Information in this report comes from Reuter’s reporter Greg Roumeliotis and CDC Gaming Executive Editor Howard Stutz)
