Caesars Names New CEO While Considering Takeover Options
Caesars Entertainment has named Anthony Rodio as the new Caesars CEO, with the gaming industry veteran expected to take up his appointment within the next thirty days.
New Caesars CEO Anthony Rodio
Caesars Entertainment has had a turbulent few years. In 2015, its casino operating sector, along with 170 of its subsidiaries, filed for Chapter 11 bankruptcy. There were subsequent court battles between investors and the parent company, Caesars Entertainment, regarding debts. This all subsequently led to rumours of the potential sale of the entire conglomerate.
In late 2018, then-CEO Mark Frissora announced that he would step down, and it wasn’t until just this month that the new CEO, formerly of Affinity Gaming, was named as a replacement.
Meanwhile, Caesars and Eldorado Resorts have been in merger talks since March 2019.
Massive Casino Enterprise
Caesars Entertainment started as a small business, a bingo parlour owned by Bill Harrah’s in Reno, Nevada. That small business in the 1930s grew to be Harrah’s Reno, then added Harrah’s Lake Tahoe, and eventually went public in the 1970s as Harrah’s Inc. It then became the first New York Stock Exchange listed casino-based company.
The following decades saw many changes, starting with its acquisition by hotel chain Holiday Inn in 1980. When Holiday Inn’s hotels were sold to another company 10 years later, Caesars Entertainment was formed and grew to expand across the United States. It became Harrah’s Entertainment in 1995. Under the leadership of CEO Gary Loveman it then continued to expand.
By the mid-2000s, the company was still growing, acquiring many more properties in Las Vegas and beyond. In the midst of investing and divesting, separating hotel and gaming companies, and considering mergers, two private equity firms (Apollo Global Management and TPG Capital) bought Harrah’s in 2008. However, Harrah’s had more than $25 billion in debt.
By 2010, Harrah’s Entertainment renamed again to Caesars Entertainment, and the company went public once more in 2012. Two years later, Caesars acquired Caesars Acquisition Company. But Caesars Entertainment couldn’t escape its burdensome debt and finally filed for Chapter 11 bankruptcy protection in 2015.
Caesars Takeover Talks
At the time, Rodio was revealed as the incoming CEO of Caesars Entertainment. The company also announced that the Board of Directors would be creating a transaction committee. The official purpose of the group is to evaluate “ongoing efforts in creating additional shareholder value.” But it will also likely include assessing merger and/or acquisition deals that are already in the works or may happen.
There have been rumours for years that Caesars was open to merger and acquisition options. Moreover, the outspoken investor Carl Icahn, who has been increasing his stake in Caesars, has been rather openly pushing for it.
Icahn’s plans seem to be working.
In March of this year, sources confirmed to Reuters that Caesars was in talks with Eldorado Resorts regarding a merger. There was some exchange of financial information. However, there was no guarantee that Eldorado would make a bid or that the talks would make it that far. Nonetheless, the two companies would make an ideal fit for the casino market. That’s because the combination would make for an ideal competitor for companies like MGM Resorts, Wynn Resorts, and Las Vegas Sands. However, both Caesars and Eldorado carry billions of dollars in debt.
Speaking of MGM, the New York Post reported in late 2018 that MGM hired an investment bank and law firm to look into the possibilities of making an offer for Caesars. At that time, the activist hedge funds that owned about 25% of Caesars were encouraging an MGM deal. No further word has spread of any possibilities between the two, though.
Also in 2018, Golden Nugget owner Tilman Fertitta approached Caesars about a potential merger. But according to CNBC, Caesars rejected the deal, but Fertitta didn’t give up so easily. Reports in the past month indicate that Fertitta is still proposing variations of a reverse-merger of sorts.
New Caesars CEO Views Unclear
Rodio is currently preparing to take his CEO seat at Caesars within the next few weeks. Meanwhile, it remains unclear where he stands on merger and acquisition prospects. But he will be based in Las Vegas and join the Board of Directors.
Rodio worked with Icahn during his time as Tropicana Entertainment CEO. Rodio’s most recent position, however, was at Affinity Gaming.
Following the CEO announcement, Rodio did say that he looks forward to leading the company through its “next phase of growth, innovation and value creation” as the industry goes through a “time of transition and opportunity.”
For now, Caesars owns more than 50 casino properties, with most located in the US. There are Caesars casinos abroad – several in Egypt, one in South Africa, and more than a half-dozen in the UK. Caesars Windsor is the only Canadian property at the current time, which is managed by Caesars and owned by Ontario through the Ontario Lottery and Gaming Corporation (OLG).