A $17.6 Billion Caesars Deal, a Higher Bid From Carl Icahn — And Four Atlantic City Casinos in the Balance

Hey Folks,

Here’s one Atlantic City story worth paying attention to, because while the deal is national in size, the implications could be very local.

Billionaire Tilman Fertitta’s company has a deal in place to acquire Caesars Entertainment in a transaction valued at approximately $17.6 billion.

That alone is a major casino industry story.

But now we’ve learned there was another billionaire at the table — and it’s a name Atlantic City knows very well.

Carl Icahn.

According to reporting from the Press of Atlantic City, Icahn actually offered more money for Caesars than Fertitta did.

And Caesars still didn’t take the deal.

First, Let’s Back Up

In May, Caesars announced that it had agreed to be acquired by Fertitta Entertainment.

The terms call for Caesars shareholders to receive $31 per share in cash. The approximately $17.6 billion transaction value includes the assumption of about $11.9 billion in Caesars debt.

Caesars’ board approved the transaction and recommended that shareholders approve it.

But there was a window for Caesars to entertain a better offer.

And somebody showed up.

Carl Icahn Offered $34 a Share

According to the Press report, Icahn submitted an offer on July 10 of $34 per share — three dollars per share more than Fertitta’s $31 offer.

That’s where this gets interesting.

Caesars didn’t immediately reject it. The company extended the period during which it could consider another deal and went back and forth with Icahn.

But according to the reporting, Caesars had concerns with the technical terms of Icahn’s proposal. The parties apparently couldn’t resolve the fundamental issues, and the extended period for Caesars to pursue another transaction expired August 10.

So despite Icahn putting a higher number on the table, the Fertitta deal remains in place.

There’s a good reminder here that the biggest number doesn’t always make the best deal. In transactions this large, financing, conditions, certainty of closing and dozens of other details can matter just as much as the headline price.

Atlantic City Knows Both of These Guys

That’s what makes this more than another Wall Street merger story for those of us at the Shore.

Tilman Fertitta already has a major Atlantic City presence through Golden Nugget Atlantic City.

Carl Icahn’s Atlantic City history goes back decades. He’s been involved with the former Sands, Tropicana and, most famously, the former Trump Taj Mahal. The Taj closed in 2016 during Icahn’s ownership following a bitter labor dispute and strike. It eventually reopened under new ownership as Hard Rock Hotel & Casino Atlantic City.

Icahn also still owns property connected to the former Trump Plaza site.

So when these two names show up in a multibillion-dollar fight over Caesars, Atlantic City has a front-row seat.

Here’s the Part I’m Watching: Four of Nine Casinos

If the Fertitta-Caesars transaction closes in its current form, the combined company would have control of:

That’s four of Atlantic City’s nine casinos under one corporate umbrella.

And that’s where this story becomes particularly important for Atlantic City.

New Jersey’s Casino Control Act prohibits casino ownership that results in what the law calls “undue economic concentration.” In plain English, regulators have to consider whether one owner could have enough control over the Atlantic City casino market to substantially hurt competition or negatively affect the industry’s economic stability.

There isn’t a simple rule that says, “You can own three casinos but not four.” Regulators look at multiple factors, including market share, casino space, hotel rooms, slot machines, table games and revenue.

So four casinos doesn’t automatically mean the deal can’t happen.

But it certainly gives New Jersey regulators something substantial to examine.

And Then There’s Something Fertitta Said Years Ago

This might be the most fascinating Atlantic City wrinkle of the entire story.

The Press points back to a 2019 interview in which Fertitta said Atlantic City was “not a nine-casino market” and indicated he believed seven casinos was the right number.

Now, years later, his company could potentially control four of the nine.

I’m not suggesting that means casinos are going to close. It doesn’t.

But when you’re talking about the future ownership of nearly half the casinos in town, that old comment suddenly becomes a lot more interesting.

What Happens Next?

This deal isn’t simply a matter of Fertitta writing a check and changing the signs.

A transaction involving casino licenses has regulatory hurdles, and here in New Jersey the Casino Control Commission has an important role to play.

The Commission’s own materials show that New Jersey law specifically addresses economic concentration in Atlantic City casino ownership. That’s why one of the biggest questions going forward will be whether regulators are comfortable with a single company having this much of the Atlantic City casino market.

Could all four properties remain together?

Could regulators require changes?

Could the company eventually decide on its own that selling one of the properties makes more sense?

Those questions haven’t been answered yet.

Why This Matters Beyond the Casino Floor

You know I’m always going to look at these stories through an Atlantic City lens.

These aren’t just buildings with slot machines.

We’re talking about thousands of employees, hotel rooms, restaurants, entertainment venues, conventions, suppliers and businesses that depend on Atlantic City’s tourism economy.

Ownership matters. Investment matters. Competition matters.

I want to see operators competing for your business — renovating rooms, opening restaurants, booking entertainment, improving properties and giving people new reasons to visit Atlantic City.

That’s healthy for the town.

At the same time, Fertitta is one of the biggest names in the hospitality business, and bringing Caesars together with his gaming and restaurant operations would create an enormous hospitality company. There’s plenty of reason to watch what that investment could potentially mean for Atlantic City, too.

So I’m not ready to tell you whether four casinos under one owner would be good or bad for AC.

But I definitely think it’s a question worth asking.

What’s Coming Up

The Fertitta-Caesars deal: Watch for additional shareholder and regulatory developments as the proposed acquisition moves forward.
New Jersey review: The potential ownership of four Atlantic City casinos puts the state’s “undue economic concentration” rules squarely in the conversation.
Atlantic City properties: Keep an eye on Golden Nugget, Caesars, Harrah’s and Tropicana as the transaction progresses.

What Do You Think?

This is one where I really want to hear from you.

Would one company controlling four of Atlantic City’s nine casinos concern you?

Or do you think an owner with Fertitta’s hospitality background and resources could bring new investment and energy into these properties?

And here’s the really interesting question: If four casinos ultimately prove to be too many for one company, which Atlantic City property do you think would be most likely to change hands?

That’s a conversation we’re going to keep following, because whatever happens with this $17.6 billion deal could have consequences right here on the Boardwalk and in the Marina District.

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