Billionaire investor Carl Icahn on Tuesday disclosed he has taken a 10 percent stake in Caesars Entertainment and is pushing the casino giant to sell itself.
The activist investor said in a filing with the Securities and Exchange Commission that he wants representation on Caesars' board and for the company to refrain from immediately appointing a new CEO.
Caesars' stock is undervalued and the best way to boost it would be to sell the company, Icahn's filing states. Shares of the Las Vegas-based company jumped more than 5 percent Tuesday.
FILE- This Feb. 7, 2017, file photo shows Caesars Palace hotel and casino in Las Vegas. Billionaire investor Carl Icahn plans to drive casino giant Caesars Entertainment to sell itself. The activist investor disclosed in a securities filing Tuesday, Feb. 19, 2019, that he owns a roughly 10 percent stake in the company, confirming previous reports. (AP PhotoJohn Locher, File)
"We believe that our brand of activism is well suited to the situation at Caesars, which requires new thought, new leadership and new strategies," the filing adds.
Icahn intends to continue talks with Caesar's board of directors and management, and if necessary, he may nominate a slate of directors at the company's annual shareholders meeting, according to the filing. He also wants CEO Mark Frissora out.
Frissora, who joined Caesars in 2015 and guided it through bankruptcy reorganization, was scheduled to leave his role Feb. 8, but his departure was pushed back to the end of April. Icahn does not want Frissora's tenure to be extended again, according to the filing, and expects the company to not appoint a new leader until after he and the board have engaged "meaningfully."
Caesars emerged from an $18 billion bankruptcy in late 2017. Icahn's move comes after the casino operator was approached by at least two companies.
Caesars in November confirmed that it had received a proposal from casino operator Golden Nugget LLC, owned by Houston billionaire Tilman Fertitta. The proposal called for Caesars to "acquire substantially all of Golden Nugget's restaurant, hospitality, entertainment and gaming businesses in exchange for a significant minority of Caesars' common shares."
Caesars at the time said its board rejected the proposal, but "continues to be open to reasonable alternatives to enhance long-term shareholder value."
The Wall Street Journal last week reported an official with Eldorado Resorts Inc. also "made a preliminary approach" over the past several months.
Caesars did not immediately respond to a request for comment on the filing. It is scheduled to report its fourth-quarter results Thursday. Its stock ended up 47 cents to $9.62 on Tuesday and is up almost 42 percent so far this year. But it's still down 27 percent in past 12 months.
Analysts at J.P.Morgan in a note to investors said they do not see an obvious suitor that could or would take Caesars' entire portfolio of assets, including the nine properties on the Las Vegas Strip. They pointed to MGM Resorts International as the "most obvious potential acquirer," but said that company has been clear about giving priority to its current projects.
Alex Bumazhny, gambling analyst with Fitch Ratings, told The Associated Press Icahn "has a good track record" in the gambling sector.
"When news breaks of (a merger and acquisition) transaction, the target's stock will gravitate towards the premium price being offered by the acquirer," he said. "Seeing that Caesars has potential suitors it's possible Icahn is simply banking he could push Caesars to accept an offer and bank the (merger and acquisition) premium."
Icahn last year sold his Tropicana Entertainment casino company for $1.85 billion.
David Katz, equity analyst at Jefferies, said there are things Caesars could do to capture a better value for its stock that do not involve selling itself, including sharing expectations more effectively. He said Caesars' "value story" has not been told effectively since the company emerged from bankruptcy.
"That story is about the brand and the loyalty program that they have," he said. "We know that that brand has value because when you visit their properties, whether or not they are the nicest, they are consistently the busiest, and that's because of the loyalty program they have."
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TOKYO (AP) — The American envoy to the United Nations called Friday for countries armed with atomic weapons to pursue nuclear disarmament as she visited the atomic bomb museum in Nagasaki, Japan.
Linda Thomas-Greenfield, who became the first U.S. cabinet member to visit Nagasaki, stressed the importance of dialogue and diplomacy amid a growing nuclear threat in the region.
“We must continue to work together to create an environment for nuclear disarmament. We must continue to prevent the spread of nuclear weapons in every corner of the world,” she said after a tour of the atomic bomb museum.
“For those of us who already have those weapons, we must pursue arms control. We can and must work to ensure that Nagasaki is the last place to ever experience the horror of nuclear weapons,” she added, standing in front of colorful hanging origami cranes, a symbol of peace.
The United States dropped the world’s first atomic bomb on Hiroshima on Aug. 6, 1945, destroying the city and killing 140,000 people. A second attack three days later on Nagasaki killed 70,000 more people. Japan surrendered on Aug. 15, ending World War II and its nearly half-century of aggression in Asia.
Nagasaki Gov. Kengo Oishi said in a statement that he believed Thomas-Greenfield's visit and her first-person experience at the museum “will be a strong message in promoting momentum of nuclear disarmament for the international society at a time the world faces a severe environment surrounding atomic weapons.”
Oishi said he conveyed to the ambassador the increasingly important role of Nagasaki and Hiroshima in emphasizing the need of nuclear disarmament.
Thomas-Greenfield's visit to Japan comes on the heels of Prime Minister Fumio Kishida's official visit to the United States last week and is aimed at deepening Washington's trilateral ties with Tokyo and Seoul. During her visit to South Korea earlier this week, she held talks with South Korean officials, met with defectors from North Korea and visited the demilitarized zone.
The ambassador said the United States is looking into setting up a new mechanism for monitoring North Korea's nuclear weapons program. Russia and China have thwarted U.S.-led efforts to step up U.N. sanctions on North Korea over its ballistic missile testing since 2022, underscoring a deepening divide between permanent Security Council members over Russia’s war on Ukraine.
She said it would be “optimal” to launch the new system next month, though it is uncertain if that is possible.
The U.N. Security Council established a committee to monitor sanctions, and the mandate for its panel of experts to investigate violations had been renewed for 14 years until last month, when Russia vetoed another renewal.
In its most recent report, the panel of experts said it is investigating 58 suspected North Korean cyberattacks between 2017 and 2023 valued at approximately $3 billion, with the money reportedly being used to help fund its weapons development.
The United States, Japan and South Korea have been deepening security ties amid growing tension in the region from North Korea and China.
U.S. Ambassador to United Nations Linda Thomas-Greenfield, left, and Japan's Prime Minister Fumio Kishida, right, shake hands during a meeting Friday, April 19, 2024, at prime minister's office in Tokyo. (AP Photo/Eugene Hoshiko, Pool)
U.S. Ambassador to United Nations Linda Thomas-Greenfield, left, and Japan's Prime Minister Fumio Kishida, right, shake hands during a meeting Friday, April 19, 2024, at prime minister's office in Tokyo. (AP Photo/Eugene Hoshiko, Pool)
U.S. Ambassador to United Nations Linda Thomas-Greenfield, right, speaks to Rahm Emanuel, U.S. Ambassador to Japan, second right, as they wait for a meeting with Japan's Prime Minister Fumio Kishida Friday, April 19, 2024, at prime minister's office in Tokyo. (AP Photo/Eugene Hoshiko, Pool)
U.S. Ambassador to United Nations Linda Thomas-Greenfield, left, and Rahm Emanuel, U.S. Ambassador to Japan, right, walk to meet Japan's Prime Minister Fumio Kishida Friday, April 19, 2024, at prime minister's office in Tokyo. (AP Photo/Eugene Hoshiko, Pool)
U.S. Ambassador to United Nations Linda Thomas-Greenfield, left, and Japan's Prime Minister Fumio Kishida, right, talk prior to a meeting Friday, April 19, 2024, at prime minister's office in Tokyo. (AP Photo/Eugene Hoshiko, Pool)
U.S. Ambassador to United Nations Linda Thomas-Greenfield, left, and Japan's Prime Minister Fumio Kishida, right, prepare to talk during a meeting Friday, April 19, 2024, at prime minister's office in Tokyo. (AP Photo/Eugene Hoshiko, Pool)
