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Caesars Confirms Anthony Rodio Appointment as CEO: What’s Next for the Casino Giant?

Caesars confirms Anthony Rodio’s appointment as CEO, sets up Transaction Committee to explore M&A, other opportunities for enhancing shareholder value

Casino and hospitality giant Caesars Entertainment Corp. announced today the appointment of Anthony Rodio as its new Chief Executive Officer. Mr. Rodio will replace the company’s outgoing CEO Mark Frissora.

The casino operator also said in a statement from earlier today that it has set up a Transaction Committee, composed of independent directors, that will consider and evaluate “various paths for enhancing shareholder value.”

Mr. Rodio will join the Caesars team within the next 30 days. He will be based in Las Vegas where he will be tasked with, among other things, navigating the company through a potential sale or merger and helping it reduce a behemoth long-term debt that currently stands at around $18 billion.

Mr. Rodio currently serves as CEO of private gaming company Affinity Gaming, which he joined this past fall. Prior to that, he served as CEO and President of Tropicana Entertainment Inc. The gambling company was owned by New York investor Carl Icahn at the time.

According to media reports, it was namely Mr. Icahn who recommended Mr. Rodio as a replacement to Caesars’ outgoing Chief. First suggestions about the now confirmed appointment emerged back in February when the New York businessman became the largest shareholder of the Las Vegas casino giant.

Mr. Icahn’s stake in Caesars currently stands at 28.5% and the activist investor is pressing the company to sell itself or merge with another entity as he believes this is the best path forward.

A Track Record of Operational Excellence

Commenting on the appointment of Mr. Rodio, James Hunt, Chairman of Caesars’ Board, said today that the company’s new Chief “is a respected and highly accomplished executive who has successfully built and grown businesses” in the land-based casino sector.

Mr. Hunt further pointed out that Mr. Rodio is bringing a “track record of operational excellence, proven leadership and deep industry knowledge and expertise.”

Mr. Rodio said that he has “long admired Caesars” and that he is “optimistic about the company’s future prospects.” The experienced executive further dwelt that the land-based casino industry is “going through a time of transition and opportunity” and that he looks forward to leading Caesars’ “exceptional team” through its next phase of “growth, innovation and value creation.”

Mr. Rodio has nearly four decades of experience in the industry. He first joined the casino sector as an accounting clerk, but quickly transitioned into management positions. Over the course of his career, he has held multiple executive roles at major casino brands, including Harrah’s Entertainment, Penn National Gaming, and most recently Tropicana Entertainment.

Mr. Rodio is set to replace Mark Frissora as Caesars’ top executive. Mr. Frissora announced his departure last year and was due to leave the company in February. However, it was then revealed that Mr. Frissora will stay with the gambling powerhouse until mid-April while it was searching for his successor.

Caesars’ now ex-boss steered the company through a lengthy and complex bankruptcy case that concluded in the fall of 2017.

Caesars Sets Transaction Committee

Following recent reports that Caesars was preparing to put itself up for sale, the company’s board announced today that it has set up a special Transaction Committee, composed of independent directors, to consider “various path for enhancing shareholder value”, including continuing its operations as an independent public company as well as a sale or merger with another business.

The committee includes Thomas Benninger, Keith Cozza, Don Kornstein, and Courtney Mather. Two of the committee members – Mr. Cozza and Mr. Mather – were recently named by Mr. Icahn to joined Caesars’ board.

The company also said that it has tapped PJT Partners to assist it in reviewing and assessing recent acquisition offers. According to reports from the past several weeks, Caesars has been approached by Eldorado Resorts and by Texas businessman Tilman Fertitta and his Golden Nugget casino chain with interest to acquire their much larger rival.

The Las Vegas gambling powerhouse is believed to have granted access to its financials to both bidders and that they have started due diligence to explore a potential takeover.

Caesars said in today’s statement that “there can be no assurance that the exploration with other industry participants will result in any transaction or other result.” In other words, the company might still decide to continue operating as it is, despite pressure from its largest stakeholder, Mr. Icahn.

What Analysts Think

Commenting on the recent developments surrounding Caesars, Morgan Stanley analysts say they believe the company’s “large shared services program and sophisticated loyalty program” position it well for a potential M&A deal.

Of the two reported interested bidders, Morgan Stanley analysts consider Eldorado as “potentially the more plausible acquirer” due to its public track record of “exceeding synergy targets”, a benefit that investors might be willing to underwrite.

If any of the two bids is approved by Caesars, the transaction will have to be a reverse merger with an offer of a mix of stock and cash as both Golden Nugget and Eldorado have enterprise values of between $7 billion $8 billion, which means they are significantly smaller than Caesars at around $20 billion.

In addition, Morgan Stanley’s analysts note that a deal would likely involve an asset divestiture due to geographical overlap of properties. The sale of properties is a typical condition for the completion of merger and acquisition deals within the casino industry, particularly when involved companies run operations in major casino markets such as Las Vegas, Atlantic City, and Indiana.

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The post Caesars Confirms Anthony Rodio Appointment as CEO: What’s Next for the Casino Giant? appeared first on Casino News Daily.

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April 2019
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