(Reuters) – US casino operator Caesars Entertainment Corp is in talks to offer Carl Icahn a role in choosing his new CEO as part of an agreement that also provides investors with space for investors, people who know the case Sunday.
FILE PHOTO – Billiard activist investor Carl Icahn gives an interview on the Neil Cavuto show in the FOX Business Network in New York on February 11, 2014. REUTERS / Brendan McDermid / File Photo
Negotiations come after Icahn revealed a 9.8 percent stake in Caesars on Tuesday and said he could nominate a board member to the board of directors.
Icahn also asked the emperors to start a process of exploring a sale. The company responded Wednesday that all the agreements it had investigated so far underestimated it and did not provide enough value to the shareholders, but noted that it would continue to evaluate strategic options presented to it.
Icahn has suggested Anthony Rodio, CEO of the privately owned casino game company Affinity Gaming, to succeed Mark Frissora, due to decline as Caesar's CEO later this year, sources said. Rodio was formerly CEO of Tropicana Entertainment Inc., another casino and resort operator that Icahn sold last year to peer Eldorado Resorts Inc for $ 1.85 billion.
Caesars already has a shortlist of CEO candidates and has indicated that Icahn is willing to consider Rodio as well, the sources said. As an alternative, the company could offer Rodio a role in monitoring operations, some of the sources added.
Caesars do not currently have a chief operating officer, although some of these tasks are performed by their president, Tom Jenkin.
Caesars is open to Icahn to have an expression in the election of the company's new CEO, as he has requested, the sources said.
Caesars are also open to giving the Icahn board representation, the sources say, although the number of table seats and names and titles of those who fill them is still under negotiation, the sources said. Icahn could get a significant minority of the board's 12 seats as part of an agreement, the sources said.
The deadline for Icahn to appoint his own directors expires on March 1. If an agreement between Caesars and Icahn is not reached this week, the company may extend the nomination deadline or continue to negotiate with Icahn even if he registers a board slate for election, the sources said.
The sources requested not to be identified because the negotiations are confidential. Caesars refused to comment, while Icahn did not respond to a comment request. Rodio could not be reached for comment.
On Thursday, Caesars said it expected "to continue a constructive dialogue" with Icahn. Clinical agreement with Icahn as early as the end of this week will allow the company to avoid a proxy competition over the composition of the board.
On Friday, another top investor in Caesars, hedge fund Canyon Partners LLC, also asked to run an "open sales process". While Canyon supports Icahn's cause, there are currently no talks with the Emperors to give the Canyon government representation, one of the sources said. Canyon refused to comment.
Caesars, whose casinos include Harrah's and the Horseshoe brands, came out of bankruptcy in 2017 after they failed to cope with some $ 25 billion in debt. The company now has a market value of $ 6 billion. Its debt at the end of December was $ 9.1 billion.
Last year, the emperors rejected a merger method from Tilman Fertitta, the billionaire's owner of Golden Nugget Casinos. This agreement would mainly have been structured as an acquisition of the emperors given its larger size. Eldorado Resorts, which is also smaller than Caesar's with a market capitalization of $ 3.8 billion, also explored a bid for the emperors last year, but never made a bid, according to the sources.
Icahn has owned a number of casinos over the years, although his only remaining property is the Trump Plaza Hotel and Casino in New Jersey Atlantic City, which has been closed since 2014.
Reporting by Greg Roumeliotis in New York; Editing by Cynthia Osterman