It’s a perfect match; everything wrong with the gaming business in a one-stop shop. I can’t wait….

Hopefully this would void Jack’s (Binion) non-compete, so he can get back into the business.

The talk of a merger between Ceasars and MGM properties is all the work of activist hedge funds, which together own about a 25 percent chunk of Caesars Entertainment. One of the hedge funds is the Canyon Partners. That little $18B firm, under Joshua Friedman, talked up a merger between Ceasars and MGM back in May 2016 at SALT (https://www.salt.org/). These guys (activist hedge funds) make money by taking on debt for a company that is in position to be sold. Simply put, they get the debt money back plus commission and "fees". No merger – no money.

My question is, would a merger of Ceasars and MGM result in a more successful company? Since both companies’ stocks are down, largely because Ceasars stock fell sharply, I can’t see a big picture reason for such a merger. Sure, there are many small players who make their money on mergers, just like the lawyers and brokers make money, lots, selling public road bonds for municipalities. But a road bond is pointless if there is no road to build.

According to the Motley Fool, what really sent shares lower for Ceasars Entertainment was management’s recent comments about competitive pressures on room rates. CFO Eric Hession said there was "softening" of demand in July and August. So, the CEO will be gone in February or sooner. The merger with Golden Nugget actually made sense. Ceasars Entertainment would benefit tremendously with Tilman Fertitta’s successful business model. I could go into details, but suffice it to say that Fertitta is the Trump of the casino entertainment industry. Just the mention of a merger between Ceasars and Golden Nugget under Tilman sent the shares of Caesars Entertainment up by 12% just last month.

I guarantee these little activist hedge funds, like Canyon Partners, were the fly in the ointment. They started doing their nasty, little, small minded machinations to get their chunk of what they considered a dying mound of flesh. And Tilman told them exactly what they could do – and coming from a Texan, it would not have been anything nice.

I agree with NFF that a merger of MGM with Ceasars would result in a stifling of competition on the strip. But it would be short lived. The debt alone of such a merger (to pay off the hedge funds) will result in all of their properties messing with room rates and casino profits, to squeeze out every dime they could. A merger like this will probably end up back in bankruptcy court.

If the merger does not happen, and if Ceasars does not go back to the table with Tilman Fertitta (I really hope they will), and if their stock continues to drop, they’ll be back in bankruptcy within a year. Only record revenue could save them – and that won’t happen if they start tightening ship, again. Customers will flee.

Our only hope was when both corporations were in trouble a decade ago there could have been a sell off of some assets. MGM dumped TI and Caesars had some properties on the market but didn’t sell any.
I have doubts that the NV Gaming Commission would allow it baring heavy bribes from those corporations which would need to be larger than the usual bribes. This proposed merger IMO could only be done if both companies were to sell some of their Vegas casinos to others.