Rumors are swirling about another big potential merger for Las Vegas hotels, this time between MGM and Caesars Entertainment.
According to sources cited by the NY Post, MGM has hired an investment bank and law firm to explore a potential deal. The move is being driven by activist hedge funds that collectively own about a quarter of Caesars, which has seen its stock fall by 25 percent year to date. At the same time, sources emphasized to the Post that no offer is on the table right now.
“Everyone knows that without a CEO, Caesars is in play,” the NY Post quoted a “source with direct knowledge of the situation” as saying.
Last week Caesars reported that its President and Chief Executive Officer Mark P. Frissora is leaving the company, although he will remain in his current role through February. The company’s Board of Directors said that they would work with a nationally recognized search firm to identify Frissora’s successor.
The latest merger rumor isn’t the first for Caesars. Last month, Reuters reported that Tilman Fertitta, the owner of Golden Nugget Casinos, had approached the company regarding a potential “reverse merger” that would see Caesars acquire Golden Nugget, but with Fertitta as the combined company’s largest shareholder, chairman and chief executive.
David Schwartz, director of the Center for Gaming Research at UNLV, told Las Vegas Now that a Caesars – MGM merger would give the combined company an “overwhelming presence” in Las Vegas.
“I think these companies are always exploring their options through things like this,” Schwartz said. “They’re always looking at mergers and consolidations, so it’s not really surprising MGM would be considering this right now.”