Caesars Responds to Shareholder Demand Letter Ahead of Takeover Vote

A party believed to be a Caesars Entertainment (NASDAQ: CZR) investor has issued a demand letter seeking access to certain financial records ahead of the meeting at which shareholders will vote on Tilman Fertitta’s proposed $17.6 billion takeover through Fertitta Entertainment Inc. (FEI).

In a Form 8-K filing with the Securities and Exchange Commission (SEC), Caesars acknowledged that on Tuesday, Sept. 15 it received a demand letter “from a purported stockholder of the company.”

Citing Section 220 of the General Corporation Law of the State of Delaware, the potentially disgruntled investor claims that in an August proxy filing, Caesars didn’t disclose that its legal counsel Latham & Watkins LLP also has a relationship with entities tied to FEI.

Responding in a filing, Caesars said it believed the claims were “without merit” and “immaterial,” adding that no further disclosure is required under applicable law.

However, the company noted that it was supplementing the proxy statement to avoid delays to the takeover and potentially costly legal proceedings.

Caesars Denies Wrongdoing

While Caesars did bolster its proxy filing, it’s not admitting any wrongdoing nor is the casino operator confirming that the shareholder who issued the demand letter is in the right. The company said:

Prior to the Harrah’s operator acknowledging receipt of the demand letter, it was fair to say that the most interesting nugget in the August proxy filing was confirmation that the company had held takeover talks with Carl Icahn and that the discussions dated back to 2025.

The corporate raider offered $34 a share to acquire the Horseshoe operator, but that bid was rejected due to debt-related complexities and lack of support from the Carano family, which controls a significant portion of Caesars equity.

It was revealed last week that two Icahn Enterprises (NYSE: IEP) employees who also served on the Caesars board resigned from those director roles.

More Hurdles to Clear

Caesars investors are likely to approve the Fertitta offer because the board has recommended they do so and because aside from the Icahn proposal, there’s no known competing bid.

After today, the next hurdles are regulatory as the Federal Trade Commission (FTC) is requesting information related to the acquisition.

Additionally, the combined Caesars/Golden Nugget is likely to face substantial state-level scrutiny due to the fact the two casino companies overlap in several markets, including Las Vegas and Atlantic City.