Houston billionaire Tilman Fertitta is setting himself up to be one of the biggest players on the Las Vegas Strip with his buyout of casino giant Caesars Entertainment Inc.
And with the deal, he also inked one of the highest-valued casino transactions in Las Vegas history.
His conglomerate Fertitta Entertainment Inc. reached a deal to acquire Caesars for $5.7 billion plus the assumption of $11.9 billion of debt, putting the total transaction value at $17.6 billion. The buyout was announced on May 28.
Another supersized deal could be on the way. Billionaire media mogul Barry Diller on Monday offered to buy out MGM Resorts International and take the Las Vegas casino giant private.
According to CBRE Capital Advisors, the proposal values MGM at $17.6 billion, as well.
As with any buyout offer, there’s no guarantee the deal for MGM will close at the offered price, or at all. So for now, at least, Fertitta’s buyout value of Caesars appears to be the second highest ever among deals that heavily involved Las Vegas casinos.
The only one that tops it was reached in 2006, when a pair of investment firms acquired Harrah’s Entertainment in a deal then valued at $27.8 billion.
The total value jumped to $30.7 billion at closing in 2008 — and the casino company later changed its name to Caesars Entertainment Corp.
‘Size, complexity and regulatory hurdles’
Today, Reno-based Caesars is the second-largest casino operator on the Strip with eight properties, including Caesars Palace, Harrah’s, Horseshoe Las Vegas, Paris Las Vegas, and the Flamingo.
Fertitta — currently the U.S. ambassador to Italy — is also the largest shareholder in Wynn Resorts, which owns the luxury Wynn Las Vegas and Encore towers on the Strip.
Truist Securities analysts Barry Jonas and Patrick Keough wrote in a research note that they expect a closing timeline of at least 12 months for the Caesars buyout, “given the size, complexity and regulatory hurdles of the deal.”
In their news releases on the buyout, neither Caesars nor Fertitta Entertainment said when the sale is expected to close.
The transaction could face heavy regulatory scrutiny, given Fertitta’s existing ownership in two separate casino operators: Wynn and the Golden Nugget chain.
Plus, his deal with Caesars includes a “go-shop” period through July 11 that lets the seller consider other proposals.
Still, Fertitta’s assumption of Caesars’ heavy debt load is pushing the transaction value into the upper reaches of Las Vegas casino buyout history — a cluster of mega-deals that all involved the iconic Caesars Palace and the companies behind it.
Billions in transactions
As tracked by the Las Vegas Review-Journal, the third-highest casino buyout in local history as ranked by total transaction value was Eldorado Resorts’ acquisition of Caesars Entertainment Corp.
The deal was announced in 2019 and valued at $17.3 billion, including $7.2 billion in cash.
Reno-based Eldorado also shed its name and adopted Caesars Entertainment Inc.
Meanwhile, the fourth-highest deal, announced in 2021, was casino landlord Vici Properties’ acquisition of MGM Resorts’ real estate spinoff.
That deal was valued at $17.2 billion, including the assumption of $5.7 billion of debt.
New York-based Vici vastly expanded its real estate holdings through the deal, giving it ownership of several hotel-casinos on the Strip that are leased by MGM, including Mandalay Bay, MGM Grand, Park MGM, Luxor and Excalibur.
Vici itself was launched in 2017 as a spinoff from Caesars Entertainment — and the landlord’s portfolio includes Caesars Palace.
Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342.
