MGM Resorts and Caesars Entertainment Reportedly in Talks for Merger
MGM Resorts and Caesars Entertainment are allegedly in talks for a merger.
The New York Post was the first to report on the rumours of the merger, revealing that the two popular Las Vegas casinos are looking to create a giant company, giving them control of about half of Las Vegas and Atlantic City’s gaming and hospitality markets.
According to the article, MGM Resorts hired investment bank Morgan Stanley and law firm Weil, Gotshal & Manges to study a potential merger with Caesars Entertainment, though no offer has been made.
Sources close to MGM and Caesars Entertainment told the NY Post that activist hedge funds, which collectively own about a quarter of Caesars, has been pushing for the firm to tie with MGM for some time.
A merger between the two companies would create a behemoth company with a market capitalization of over $21 billion, the NY Post reports. If merged, the two companies will also own around half of all the hotel rooms in Las Vegas and Atlantic City.
While the merger may be pursued between the two companies, the NY Post does claim that Caesars Entertainment is also considering a tie-up with Wynn Resorts and Malaysia’s Genting Group. Meanwhile, Spanish private equity firm The Blackstone Group has also been eyeing up Caesars.
A New CEO
The news comes days after the company announced that its CEO and President Mark Frissora would step down in February 2019 for unknown reasons.
Caesars announced the news during its Q3 financial results conference last week where they revealed a financial loss compared to the same period last year.
The New York Post suggests that Frissora was dethroned because he was opposed to the company’s sale and his opinion on the matter was clashing with those of its investors.
Frissora, who joined the popular casino company back in 2015 after leaving his CEO position at car rental company Hertz, will stay with the Las Vegas-based company until February 8, 2019. The firm has already begun searching for a replacement.