In a surprising move, Caesars Entertainment (NASDAQ: CZR) CEO Tom Reeg is expected to lead the combined operations of Fertitta Entertainment Inc. once its $17.6 billion acquisition of Caesars closes.
The expanded mandate places Reeg at the helm of an empire that will merge Caesars’ iconic resorts with Tilman Fertitta’s Golden Nugget casinos and Landry’s dining portfolio.
Our own Vital Vegas broke the news late Monday, noting that it’s unusual for chief executive officers of acquired casino companies to stick around post-merger. Previously, it was disclosed that Reeg would stay on board to oversee the combined casino operations of Caesars and Golden Nugget.
With Reeg expected to run the Landry’s side, he’ll oversee Fertitta’s extensive gaming, leisure, and lodging portfolio. However, his scope won’t extend to Fertitta Automotive, the NBA’s Houston Rockets, or the billionaire’s extensive commercial real estate holdings in Texas.
An Interesting Choice by Fertitta
Assuming the Vital Vegas report is accurate (he’s usually spot-on), keeping Reeg around and essentially handing him a promotion is an intriguing move by Fertitta.
Since Eldorado Resorts, the company previously run by Reeg, closed its acquisition of “old Caesars” on July 20, 2020, shares of “new Caesars” have lost 24.2% while shares of rival MGM Resorts International (NYSE: MGM) rose nearly 75%. Life may prove easier leading a private company—which Caesars will become once the deal closes, expected by mid-2027.
Reeg’s elevation to head a 600-plus restaurant empire—featuring brands like Bubba Gump Shrimp Co., Chart House, Del Frisco’s, Mastro’s, and Morton’s—is notable for another reason: the Caesars boss once famously quipped regarding dining comps for gamblers, “God forbid they stop at McDonald’s on the way home.”
While Caesars has moved slowly to reduce its debt burden in recent years, the company has proven adept at divesting non-core assets under Reeg’s leadership. That skillset could prove vital if regulators force the combined Caesars/Golden Nugget entity to shed properties in overlapping jurisdictions.
Caesars Q3 Update
The Harrah’s operator reported third-quarter financial results after the market close today, posting a loss of $0.61 per share on net revenue of $2.94 billion. Wall Street consensus estimates had called for a narrower loss of $0.11 per share.
While weakness on the Las Vegas Strip weighed on results, Caesars highlighted a nearly 6% revenue increase across its regional casino operations during the quarter ended Sept. 30. That regional growth may ease market concerns surrounding ongoing master lease negotiations with landlord VICI Properties (NYSE: VICI).
Due to the pending transaction, Caesars did not hold a quarterly earnings call.
Source link
