Tilman Fertitta, the owner of the Golden Nugget casinos, has approached Caesars Entertainment Corp. about a possible merger, according to people familiar with the billionaire’s plans, Bloomberg News reported. The proposed deal would see closely held Golden Nugget acquired by its larger Las Vegas-based rival in a merger that values Caesars at about $13 a share. Revenue on the Las Vegas Strip has been tepid and Caesars, with a market value of $7.07 billion, disappointed shareholders this summer with a warning of tough conditions in the top U.S. gambling market. Under the plan proposed by Fertitta, who would become chairman and chief executive officer of the combined company, Caesars would sell the land and buildings associated with Landrys and Golden Nugget to a real-estate investment trust, said one of the people. Caesars would use some of that cash to repurchase its own shares, with Fertitta emerging as the largest single owner, the person said. Caesars has been led since 2015 by Mark Frissora, former chief executive officer of Hertz Global Holdings Inc. Many of the company’s largest shareholders are private equity funds such as Apollo Global Management and TPG, or distressed debt investors, that came aboard in a 2008 leveraged buyout or through a subsequent bankruptcy and restructuring of its largest division.
