2 of the US’s biggest casinos are reportedly exploring a deal (CZR, MGM)
MGM is considering a merger with Caesars Entertainment, a report says.
Caesars CEO Mark Frissora announced last week that he will step down on February 8.
The CEO change should have no impact on ongoing mergers, said Barry Jonas, an analyst at SunTrust Robinson Humphrey.
Watch MGM and Caesars Entertainment trade in real time here.
Caesars Entertainment was gaining around Monday, up as much as 3%, after a report said MGM could make a play for the struggling casino chain.
MGM has hired investment bank Morgan Stanley and law firm Weil, Gotshal & Manges to work on a possible merger with Caesars, according to New York Post, citing sources familiar with the matter. Activist hedge funds including Canyon Partners, which holds sizable stakes in both companies, have been pushing for the combination, but no offer is on the table yet, the sources said.
If a deal is completed, MGM and Caesars would own about half the hotel rooms in Las Vegas and Atlantic City, according to the New York Post.
Talk of a deal comes at an interesting time for Caesars as CEO Mark Frissora, who helped guide the company through the bankruptcy, announced last week that he will step down on February 8. The activist hedge funds, which together own about a 25% stake in Caesars, are seen to be behind the ouster of Frissora, according to one of the New York Post’s sources.
“Mr. Frissora noted on the call that the CEO change should have no impact on ongoing mergers and acquisitions while the company did explicitly reject,” Barry Jonas, an analyst at SunTrust Robinson Humphrey, recently said in a note sent out to clients.
A combination could be a saving grace for Caesars shareholders who have witnessed the stock plunge 25% since the company’s restructuring …read more
Source:: Business Insider