Carl Icahn poised for significant Caesars board influence

Updated February 20, 2019 - 5:39 pm

Caesars Entertainment Corp. may not be able to stop Carl Icahn from grabbing significant board influence as the casino operator transitions to new corporate governance rules.

Icahn owns nearly 10 percent of the company, according to Securities and Exchange Commission filings published Tuesday. In SEC documents, Icahn said he was seeking board representation and encouraged the company to be sold.

Caesars is shifting from staggered, three-year terms for board directors to one-year and will have seven of 12 seats up for re-election at the 2019 annual shareholders meeting. All 12 seats will be up for re-election in 2020, improving Icahn’s chances of getting multiple representation.

The casino operator permits cumulative voting, which allows shareholders to cast all of their votes for a single nominee, increasing the chances of minority shareholders to elect a director.

“A cumulative voting structure will make it much easier for Icahn to get his representatives on the board,” said Ben Edwards, a UNLV law professor focusing on corporate governance.

Icahn has until March 1 to submit candidates for this year’s election, which will likely be held in late spring.

Significant board representation would enable the billionaire investor to influence key decisions, including the sale of the company as well as the choice of a new CEO.

Icahn’s chances of gaining seats would grow as he is able to recruit more shareholders.

“The more (hedge) funds he draws to his cause will increase his reach. With the large blockholders in the stock, it would not be surprising if he picked up a couple seats,” Edwards said.

Los Angeles-based Canyon Capital owned 10.4 percent of Caesars as of Dec. 31. Icahn and Canyon last year resisted Dell’s effort to buy back of shares tied to its interest in VMware Inc. for $21.7 billion. Canyon did not respond to a request for comment about its support for Icahn.

Second battle with Frissora

Icahn said Tuesday that Caesars should not extend CEO Mark Frissora’s contract or hire a new executive until he has had time to speak with the board.

Frissora announced in November he would step down when his contract expired in February, but the company extended his tenure until April as it continues to seek a successor. Caesars said Wednesday it has been holding talks with Icahn.

Icahn took aim at Frissora in SEC documents, saying Caesars “requires new thought, new leadership and new strategies.’’

Caesars responded to the billionaire hedge fund activist Wednesday, saying it will “evaluate” his suggestions and defending Frissora’s leadership.

Caesars has cut costs, boosted margins and slashed annual interest payments by $300 million during Frissora’s tenure, the company said.

“Caesars has continued to expand margins by driving record labor and marketing efficiency levels, while also achieving all-time high customer and employee satisfaction,” the company said in a statement.

Caesars is forecast to post property cash flow margins this year of 36 percent compared with 30 percent for its largest Strip rival, MGM Resorts International, according to JPMorgan Chase. Wall Street analysts have complimented Frissora for improving the company’s operating efficiency. Caesars said the increase in cash flow will enable it to cut is high debt load.

The company also said it has been pursuing new growth initiatives, including investing in gaming innovation and developing nongaming resorts. The company announced last month it would open its first nongaming property in the U.S. in Scottsdale, Arizona.

Frissora may address the situation in more detail Thursday when he hosts a conference call with analysts following publication of the company’s 2018 financial results.

Contact Todd Prince at 702-383-0386 or Follow @toddprincetv on Twitter.

Business Videos
MGM's sports betting deals
MGM Resorts International signed a sports betting sponsorship agreement with the NBA in July It was the first professional sports league to have official ties with a legal sports betting house. The deal came just two months after the U.S. Supreme Court overturned a law prohibiting sports betting in most states. In October, MGM became the first gaming company to sign a sports betting partnership with the NHL. In November, MGM became the first gaming company to sign a sports betting partnership with the MLB. Financial terms of Tuesday’s deal and earlier partnerships have not been announced.
Faraday puts Las Vegas land on the market
Nearly two years after Faraday Future bailed on its North Las Vegas auto factory, the company has put its land up for sale. (Michael Quine/Las Vegas Review-Journal)
El Cortez owner Kenny Epstein on running the iconic property
Kenny Epstein, owner of the El Cortez Hotel in downtown Las Vegas, talks about Jackie Gaughan mentorship and answers rumors about bodies in the basement at the mob-era casino. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
LVCVA recommends construction of underground people mover
The Las Vegas Convention and Visitors Authority announced the recommendation for an underground people mover for the convention center. The system would have the potential to expand and connect Downtown and the resort corridor all the way to McCarran. (Michael Quine/ Las Vegas Review-Journal)
LVCVA/Boring Company Press Conference
The Las Vegas Convention and Visitors Authority announced a collaboration with Elon Musk's The Boring Company to develop and operate an autonomous people mover system for the Las Vegas Convention Center District.
International Pizza Expo includes green and gluten free
The International Pizza Expo at Las Vegas Convention Center included companies focused on vegan and gluten free, and plant-based pizza boxes. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
International Pizza Expo kicks off in Las Vegas
The first day of the International Pizza Expo at Las Vegas Convention Center is everything Pizza. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
T-Mobile program aids guests with sensory needs
A program at T-Mobile Arena is designed to provide a more sensory friendly experience for guests.
Photo Booth Expo
Danielle May talks about how Simple Booth transformed her Volkswagen bus into a business.
Nevada Gaming Commission's highest fines
The highest fines assessed by the Nevada Gaming Commission, according to commission Chairman Tony Alamo: 1) Wynn Resorts Ltd., $20 million, 2019 2) CG Technology (then known as Cantor G&W Holdings), $5.5 million, 2014 3) The Mirage, $5 million ($3 million fine, $2 million compensatory payment), 2003 4) Stardust, $3 million, 1985 5) Santa Fe Station, $2.2 million ($1.5 million fine, $700,000 compensatory payment), 2005 6) Las Vegas Sands, $2 million, 2016 7) CG Technology, $1.75 million, 2018 8) CG Technology, $1.5 million (also $25,000 in escrow for underpaid patrons), 2016 9) Caesars Entertainment, $1.5 million, 2015 10) Imperial Palace, $1.5 million, 1989 11) Peppermill Casinos, $1 million, 2014
Tiny Pipe Home vs Shipping Crate
A Tiny pipe home was displayed at the International Builders Show this week in Las Vegas.
Auto repair shortage affects Las Vegas
The auto repair industry is facing a national shortage of workers.
Franchising industry booming
Experts say Las Vegas is a hotbed for the franchise industry.
Africa Love owner talks about his store in Las Vegas
Mara Diakhate, owner of Africa Love, gift and decor store, talks about his store in Las Vegas. (Bizuayehu Tesfaye/ Las Vegas Review-Journal) @bizutesfaye
Developer gets approval to build homes at Bonnie Springs
The Clark County Planning Commission has approved a plan to build 20 homes on the site of Bonnie Springs Ranch. (Michael Quine/Las Vegas Review-Journal)
Dig This opens new location In Las Vegas
Remember when you were a kid and played with construction toys in the sand box? Dig This Las Vegas has the same idea, except instead of toy bulldozers, you get to play with the real thing. (Mat Luschek/Review-Journal)
Town Square developer Jim Stuart building again in Las Vegas
Las Vegas’ real estate bubble took developers on a wild ride, something Jim Stuart knows all too well. (Las Vegas Review-Journal)
Salon opens at Veterans Village
T.H.E. Salon, owned by Nicole Christie, celebrated their opening at the Veterans Village with a ribbon cutting ceremony.
Southwest Airlines considering Las Vegas-Hawaii flights
Southwest Airlines CEO Gary Kelly says the airline is "very focused" on Hawaii. Hawaiians have a strong presence in Las Vegas.The city’s unofficial status is “Hawaii’s ninth island.” In 2018, at least 2,958 people from Hawaii moved to Nevada. Of those, 88.7 percent moved into Clark County, according to driver license surrender data. According to the Las Vegas Convention and Visitors Authority, 310,249 people came to Las Vegas from Hawaii in 2018.
Fewer Nevadans are celebrating Valentine's Day
Fewer Nevadans are celebrating Valentine's Day. About 1.2 million Nevadans are expected to celebrate this year, a 5 percent drop from 2018. A growing number of people consider Valentine’s Day over-commercialized. Others weren’t interested in the holiday or had nobody to celebrate with. But spending is expected to rise. Those who do celebrate are buying for more people. The average American is expected to spend about $162 this year for Valentine’s Day, a 57 percent jump from a decade prior. Katherine Cullen, director of industry and consumer insights at NRF
Foreclosures of mansions in Las Vegas
Las Vegas was ground zero for America's foreclosure crisis after the housing bubble burst. (Eli Segall/Las Vegas Review-Journal)
Rick Helfenbein talks about the impact of tariffs on the clothing industry
MAGIC fashion convention showcases men's clothing trends
The MAGIC fashion convention has come to Las Vegas at the Mandalay Bay Convention Center to showcase some of the hottest clothing trends for men. (Nathan Asselin/Las Vegas Review-Journal)
Allegiant Air flight attendants learn how to handle a water landing
Field instructor Ashleigh Markel talks about training prospective flight attendants for Allegiant Air getting live training with a raft for a water landing at the Heritage Park Aquatic Complex in Henderson on Monday. (John Hornberg/Las Vegas Review-Journal)
Smith & Wollensky CEO Michael Feighery speaks
Smith & Wollensky CEO Michael Feighery speaks about the new Smith & Wollensky restaurant coming to the Grand Canal Shoppes at The Venetian in Las Vegas.
Smith & Wollensky CEO Michael Feighery speaks
Smith & Wollensky CEO Michael Feighery speaks about the new Smith & Wollensky restaurant coming to the Grand Canal Shoppes at The Venetian in Las Vegas.
Smith & Wollensky CEO Michael Feighery talks about Las Vegas return
Michael Feighery, CEO of Smith & Wollensky Restaurant Group, discusses the restaurant's upcoming return to the Las Vegas Strip.
Apartments to Come to Hughes Center
Developer Eric Cohen discusses his current building project at the Hughes Center office park in Las Vegas, Thursday, Jan. 31, 2019. Caroline Brehman/Las Vegas Review-Journal
Stratosphere to rebrand to The STRAT
The Stratosphere, a 1,150-foot-tall property in Las Vegas will be renamed The STRAT Hotel, Casino and Skypod.
Local designers’ picks for the Las Vegas Market
The trends that local interior designers are noticing at the Las Vegas Market this year. (Rachel Aston/Las Vegas Review-Journal)
Home Front Page Footer Listing