News about a potential merger of the two operators arrive shortly after it became known that Caesars has rejected a reverse takeover offer from businessman Tilman Fertitta, owner of the smaller Golden Nugget hotel and casino chain. Caesars said during its Q3 financial results conference last week that Fertitta’s offer was “not consistent with [the company’s] plans to create and enhance shareholder value.”
According to NY Post sources, MGM has tapped investment bank Morgan Stanley and law firm Weil, Gotshal & Manges to study a potential merger with Caesars. However, there is still no offer on the table, sources have pointed out.
Talking with sources close to the negotiations, New York Post journalist Josh Kosman says there is no formal offer on the table. However, MGM has hired Morgan Stanley to assess the practicality of merging the two gaming empires. A unification would create a business valued at more than US$50 billion.
It is also important to note that in the case of a merger, MGM and Caesars will together own about a half of all Las Vegas and Atlantic City hotel rooms, which could result in competition authorities raising concerns over the impact of a potential tie-up.
According to the NY Post, Caesars might be having other suitors besides MGM. Sources believe that Wynn Resorts and Malaysia’s Genting Group could, too, be interested in a tie-up with the Las Vegas gambling giant. Private equity firms that hold licenses to operate casino might, too, be in the mix, according to sources. The Blackstone Group, which purchased Spanish gambling company Cirsa earlier this year, was mentioned as one such private equity firm that might be eying Caesars.
Source: GMB / Casino News Daily
