Caesars Adds Two Board Members with Ties to Icahn Enterprises
Caesars Entertainment has announced the addition of two new members to its board of directors, both of whom are associated with Icahn Enterprises. Jesse Lynn, who serves as general counsel for Icahn Enterprises, and Ted Papapostolou, the company's chief financial officer, have been appointed as the newest board members. With these appointments, the casino operator's board now consists of 12 directors, 10 of whom are considered independent. Chairman Gary Carano and Chief Executive Officer Tom Reeg are the only two non-independent members.
LISTEN TO THIS ARTICLE:The announcement follows nearly 10 months after it was disclosed that Carl Icahn had taken a new position in Caesars Entertainment. At the time, the investor characterized his stake in the company as relatively small and stated that he was not pursuing activist investment strategies at the casino operator. Activist investors often seek to influence corporate decisions by securing board seats or advocating for transactions that could potentially increase shareholder value.
Related: Caesars Entertainment Reports Mixed Q2 2024 Financial ResultsAlthough Icahn previously indicated that he was not engaging in activist strategies at Caesars, his influence within the company has expanded with the appointment of two board members linked to Icahn Enterprises. He has also mentioned the possibility of working alongside the company's executive leadership to explore opportunities that could enhance shareholder value.
In recent months, the performance of Caesars Digital has been a point of discussion, with management expressing concerns that the market has not properly recognized the progress made in the iGaming and online sportsbook division. Analysts have pointed out that Caesars Digital does not receive the same premium valuation as some standalone digital sportsbook operators. When this segment is excluded, it becomes evident that the company's core land-based casino operations are trading at a noticeable discount.
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Reasons Unclear
Icahn's investment in Caesars and the latest board appointments have attracted attention, particularly given his previous role in orchestrating Eldorado Resorts' acquisition of the former Caesars Entertainment for $17.3 billion in 2020. That transaction resulted in the formation of the largest casino operator in terms of the number of properties. The latest developments have led to speculation about potential strategic moves within the company, though Icahn is not expected to push for transactions on the same scale as the 2020 deal.
One area that may attract investor interest is the potential divestiture of Caesars Digital. Analysts have suggested that selling the digital gaming segment could be an effective strategy to unlock value and improve the company's financial position.
Earlier this year, Deutsche Bank analyst Carlo Santarelli estimated the valuation of Caesars Digital at approximately $4.4 billion. If the company can secure a deal close to this valuation, such a move could contribute significantly to shareholder value while also helping to reduce Caesars Entertainment's overall debt burden.
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