Billionaire Carl Icahn announced another round of Caesars Entertainment stock purchases Monday, giving the corporate raider a 17.75 percent ownership stake in the casino operator.
In a filing with the Securities and Exchange Commission, hedge funds controlled by Icahn spent $126.7 million over the weekend to acquire another 15 million shares of Caesars. Part of the purchases included convertible bonds.
All told, Icahn, 83, has spent more than $1.023 billion since last December to become Caesars largest shareholder. News of the additional purchases sent shares of Caesars up 2.6 percent or 22 cents Monday to close at $8.67 on the Nasdaq.
The transaction solidifies Icahn’s control of Las Vegas-based Caesars, which operates nearly 40 casinos in 13 states and the World Series of Poker. Icahn, currently ranked No. 31 on the Forbes 400 with a net worth of $18 billion, said he wants Caesars to either be sold or merged with another gaming operator.
Icahn’s ownership stake means he will have to be licensed by Nevada gaming regulators.
Last week, Icahn and Caesars Entertainment management reached a deal in which Icahn representatives now control one-fourth of the company’s 12-person board of directors. Icahn also has nearly total say over who will be the company’s next chief executive. If Caesars doesn’t name a new CEO to Icahn’s liking in 45 days, he gets a fourth seat on the board.
Icahn Enterprises CEO Keith Cozza, Icahn Enterprises board member James Nelson, and Icahn Capital fund manager Courtney Mather joined the Caesars board a week ago, replacing John Boushy, Matthew Ferko, and Christopher Williams, according to an SEC filing.
Current Caesars CEO Mark Frissora announced plans last year to leave the position in February, but later agreed to remain through April when the search for a new CEO stalled. Frissora, a former CEO with Hertz, joined Caesars in July 2015 and led the company through its 30-month bankruptcy reorganization that shed $16 billion in debt and created the real estate investment trust VICI Properties.
Icahn said he wants someone with casino experience in the CEO’s office.
Icahn has had investment success in the gaming industry. He sold Tropicana Entertainment’s seven casinos for $1.8 billion last year to a partnership between Eldorado Resorts and Gaming and Leisure Properties. A year earlier, he sold the unfinished Fontainebleau project on the Las Vegas Strip – which he acquired out of bankruptcy for $150 million – to a New York developer for $600 million.
Back in 2007, he sold the Stratosphere and several other casinos to Goldman Sachs’ Whitehall Street Real Estate Fund for $1.3 billion.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
