FTC Second Request Slows Caesars, Fertitta $17.6 Billion Merger as Icahn Directors Resign

The Federal Trade Commission has asked Caesars Entertainment and Fertitta Entertainment Inc. for more information on their $17.6 billion merger, and two directors appointed at Carl Icahn’s request resigned from the Caesars board the same day, the company said in an 8-K filing with the Securities and Exchange Commission on Thursday, Sept. 17.

A second request is the FTC’s demand for additional information and documents during a merger review under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and it extends the review period before the deal can close. The companies have 30 days to comply. Caesars stated in the filing that it and Fertitta Entertainment “intend to continue to work cooperatively with the FTC in its review of the merger” and that closing remains subject to the end of the antitrust waiting period and other conditions.

The request does not block the merger, but it leaves the timeline open. Shareholders are still scheduled to vote on the takeover at a special meeting on Tuesday, Sept. 22, meaning a yes vote would come while the antitrust review is unfinished. Caesars operates more than 50 casino resorts across 16 states, including eight on the Las Vegas Strip, the footprint the FTC will examine.

In the same filing, Caesars said Jesse Lynn, general counsel of Icahn Enterprises, and Ted Papapostolou, chief executive of IEP, told Executive Chairman Gary Carano they were stepping down effective immediately. The Icahn Group also waived its right to name replacement directors under its Director Appointment and Nomination Agreement. The filing did not say whether the resignations were connected to Caesars’ rejection of Icahn’s $34-per-share cash offer in favor of Fertitta’s accepted $31-per-share proposal. Icahn reportedly holds roughly 5% of Caesars stock, and the resignations leave him without board representation days before the vote.

A third Icahn-tied director, Courtney Mather, reportedly stepped down about two months earlier.

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