Caesars Entertainment (CZR) Stock Soars 11% Amid $7B Buyout Battle

TLDR

• Shares of Caesars Entertainment (CZR) climbed as high as 11.76% following a Wall Street Journal report that billionaire Tilman Fertitta has entered exclusive negotiations to purchase the company at approximately $34 per share
• The proposed transaction is worth about $7 billion, exceeding a rival all-cash proposal of approximately $33 per share submitted by Carl Icahn’s investment firm
• Carl Icahn, who currently holds CZR shares, successfully placed two board members at Caesars last year; his proposal remains under consideration
• Investment bank Morgan Stanley increased its CZR price target from $25 to $32 while keeping an Equalweight rating, pointing to enhanced risk-reward dynamics
• Individuals close to the negotiations emphasize that no deal announcement is expected soon and discussions could ultimately fall through

Shares of Caesars Entertainment (CZR) rallied over 11% this week following news that two prominent billionaires are vying to acquire the casino and gaming company through separate private buyout offers. Trading at $26.01 on Tuesday before the reports emerged, the stock climbed to approximately $29.07 by Thursday.

Caesars Entertainment, Inc., CZR

According to the Wall Street Journal, Fertitta Entertainment—controlled by billionaire entrepreneur Tilman Fertitta—has secured exclusivity in negotiations to acquire Caesars at a price near $34 per share. The total transaction would be valued at approximately $7 billion.

Fertitta’s portfolio includes ownership of Golden Nugget and investments in Wynn Resorts and DraftKings. His prior purchase of developable real estate along the Las Vegas Strip has led industry observers to suggest that Caesars’ six company-owned Las Vegas properties are particularly appealing to the billionaire.

Earlier coverage from the Financial Times in late February had already indicated acquisition interest in Caesars, specifically mentioning Fertitta and a management-led group as possible suitors.

Meanwhile, Icahn Enterprises has submitted its own all-cash proposal valued at roughly $33 per share. Carl Icahn maintains an existing ownership position in Caesars and successfully secured two board seats at the company last year. Although Fertitta’s offer exceeds Icahn’s bid, Caesars has not officially turned down the Icahn proposal.

Sources quoted by the WSJ indicate that Caesars CEO Tom Reeg would likely continue in a leadership capacity under either acquisition scenario.

However, individuals with knowledge of the situation caution that no agreement is close to being finalized and there’s no certainty a transaction will materialize.

Morgan Stanley Raises CZR Price Target

In response to the takeover reports, Morgan Stanley adjusted its CZR price target upward to $32 from its previous $25 level, though the firm maintained its Equalweight rating. The investment bank revised its sum-of-the-parts analysis to separately evaluate Las Vegas operating and property assets, alongside current valuations for the digital business segment.

Morgan Stanley established a bullish scenario of $59 and a bearish scenario of $14. While recognizing that Caesars has faced challenges achieving steady growth momentum, the bank suggested the buyout interest may establish a valuation floor for the shares.

Year-to-date, CZR has delivered a 24% gain, although the stock has historically experienced significant price volatility.

Other Analyst Activity and Company News

Not every analyst action was favorable. Raymond James dropped Caesars from its Analyst Current Favorites roster, explaining that it currently identifies greater upside opportunity in hospitality and lodging equities.

Citizens maintained its Market Outperform stance and $34 price objective, observing that worries regarding promotional spending levels have diminished.

Company leadership has also explored options for monetizing Caesars’ digital operations, which could play a role in how any acquisition is ultimately structured.

On the product front, Caesars recently introduced Ca$hline, a new online slot title developed by its internal studio, Empire Creative. The game is currently available on Caesars digital platforms throughout New Jersey.

Despite the positive momentum, Morgan Stanley’s revised $32 target still falls short of both reported acquisition prices, underscoring ongoing uncertainty about whether either transaction will be completed.

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