It appears that Carl Icahn will be strengthening his command over the future of Caesars Entertainment after it was announced that a senior partner with Apollo Global Management had resigned as a director.
News reports say the departure of David Sambur all but assures Icahn, who has supplanted Apollo and TPG Capital as controlling shareholders, of a fourth seat on Caesars’ 12-member board, and with that the likely final say on a CEO to replace Mark Frissora, who is slated to leave the end of this month.
Icahn, the 83-year-old corporate raider whose last foray in gaming was his $1.85 billion sale of Tropicana Entertainment in 2018, began acquiring Caesars stock in December. He now owns close to 20 percent of the equity after buying the bulk of Apollo and TPG Capital’s joint holding in March. The two private equity giants shed the rest of their shares later the same month in private sales, completing their exit from the gaming giant they once owned.
TPG still has one seat on the board, held by a senior advisor, Richard Schifter.
Icahn is leading other activist shareholders in pushing for a sale or merger of Caesars, which, despite the scale and diversity of its portfolio—53 properties in 14 U.S. states and five other countries—has struggled to build investor confidence since emerging from a Chapter 11 reorganization of its largest operating subsidiary in 2017, a 33-month ordeal that was the legacy of Apollo and TPG’s ill-fated leveraged buyout of the conglomerate, then known as Harrah’s Entertainment, on the eve of the Great Recession.
The reorganization cut $16 billion of the buyout’s $25 billion debt load, relegated Apollo and TPG to minority shareholders, and spun off ownership of the portfolio to a newly formed, separately traded real estate investment trust, VICI Properties.
In the months since, with the share price languishing under $9, the company was a natural target for Icahn. Before his appearance, though, it was billionaire reality TV star Tilman Fertitta, owner of the Landry’s restaurant group, who proposed a reverse merger with his Golden Nugget casino chain that valued Caesars at around $13 per share. More recently, regional gaming giant Eldorado Resorts has been identified as a potential suitor—not surprisingly, perhaps, considering that Eldorado was Icahn’s buyer for Tropicana Entertainment.
Icahn has mentioned Tony Rodio, the industry veteran who ran Tropicana for him, as a successor to Frissora. Frissora, who came to Caesars in 2015 from Hertz Global Holdings, where he’d been chairman and CEO, steered the group through the bankruptcy reorganization but was unable to appreciably move the share price and tendered his resignation late last year. He also holds a seat on the board.
