• About Us
  • The Team
  • Advertise with Us

The latest news on the gaming industry in Asia

() () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () ()
  • Home
  • Macau
  • Philippines
  • Singapore
  • Japan
  • Rest of Asia
  • World
  • Industry Talk
  • Trends & Tech
  • iGaming
  • follow
    • Facebook
    • Twitter
    • RSS Feed
    • LinkedIn

Lack of Asia exposure an overhang for Caesars: brokerage

Mar 06, 2019 Newsdesk Latest News, Top of the deck, World  


Lack of Asia exposure an overhang for Caesars: brokerage

Brokerage Sanford C. Bernstein Ltd says it expects Caesars Entertainment Corp to remain a United States-focused casino operator with no exposure to Asia, which will continue to restrict the company’s growth. That is despite the appointment of three new directors affiliated with hedge fund activist Carl Icahn, the institution added.

Caesars announced on Friday that it had reached an agreement with Mr Icahn, which allowed the investor to add three directors to Caesars’ board. Mr Icahn controls a 9.8 percent stake in Caesars, according to company filings.

“Our fundamental view of the company remains unchanged – we believe Caesars’ long-term value is limited by execution overhang and limited organic growth,” said Sanford Bernstein in a note issued on Tuesday.

“Caesars is a U.S.-focused operator with no Asia exposure. We believe its potential foray into [South] Korea is of limited value and its U.S. business will experience limited organic top-line growth,” analysts Vitaly Umansky, Eunice Lee and Kelsey Zhu wrote.

Caesars aspires to bid for a Japan casino licence and is currently preparing for construction of a foreigner-only casino resort – with a local partner – in Incheon, South Korea.

The company has plans to develop a US$700-million casino resort near the Incheon International Airport in South Korea. It is scheduled for a 2021 launch, according to previous commentary from company executives.

In Tuesday’s memo, Sanford Bernstein said it believed Caesars’ long-term value “is limited by execution overhang and a lack of exposure to Asia growth”. The brokerage added that an upside risk would eventually come from large-scale corporate activity, such as a merger or acquisition.

Mr Icahn has publicly stated that the best path forward for Caesars would be a “thorough strategic process to sell or merge the company to further develop its already strong regional presence”.

Sanford Bernstein mentioned that discussions of a merger involving Caesars “have circulated over the past few months”, with reports linking the group to, respectively, fellow U.S.-based casino operators MGM Resorts International, Eldorado Resorts Inc and Golden Nugget LLC.

“There are some value-creating opportunities that can be done without a full merger/sale that may create short-term value,” suggested the brokerage’s team, saying that such asset sales “would deleverage the company and create short-term value” for Caesars’ shareholders.

But it added: “One key question is really whether Icahn is a long-term investor looking to create value with the existing company or looking to flip his ownership for more immediate returns. He has done both in the past.”

In December, Caesars had confirmed receiving a proposal from privately-held Golden Nugget LLC – controlled by billionaire Tilman Fertitta – for a reverse merger that would have included Caesars absorbing Golden Nugget and Mr Fertitta taking over as Caesars Entertainment’s CEO. The company said at the time it had rejected the offer.

In November, the stockbroking arm of Japanese financial institution Nomura played down reports of a merger between MGM Resorts and Caesars. “We seriously doubt that, even if there are such discussions, they will go anywhere,” said the brokerage at the time.


  • tweet
Related articles
  • Kangwon Land back to pre-Covid capacity from May 16
    Kangwon Land back to pre-Covid capacity...

    May 13, 2022  

  • Casino firm Paradise Co slips to negative EBITDA in 1Q
    Casino firm Paradise Co slips to...

    May 12, 2022  

More news
  • Moody’s downgrades SJM debt on slow Macau recovery
    Moody’s downgrades SJM debt on slow...

    May 16, 2022  

  • Macau GGR tax cut may spur 15pct EBITDA hike: JP Morgan
    Macau GGR tax cut may spur 15pct EBITDA...

    May 16, 2022  


Latest News

Moody’s downgrades SJM debt on slow Macau recovery

Moody’s downgrades SJM debt on slow Macau recovery

May 16, 2022  

Moody’s Investors Service Inc has downgraded Macau casino operator SJM Holdings Ltd’s corporate family rating (CFR) to ‘Ba3’ from ‘Ba2’. Both ratings are considered non-investment...
Read More
Macau GGR tax cut may spur 15pct EBITDA hike: JP Morgan

Macau GGR tax cut may spur 15pct EBITDA hike: JP Morgan

May 16, 2022  

Macau mulls GGR tax cut if casinos attract foreign players

Macau mulls GGR tax cut if casinos attract foreign players

May 13, 2022  

Sign up to our FREE Newsletter

UB8V5.qr.16(Click here for more)

Pick of the Day

”Any reduction in [Macau gaming] tax would be positive for future profits and cash flows, all else equal”

DS Kim, Amanda Cheng and Livy Lyu

Analysts at brokerage JP Morgan Securities (Asia Pacific)



Most Popular

  • Macau mulls GGR tax cut if casinos attract foreign playersMacau mulls GGR tax cut if casinos attract foreign players May 13, 2022
  • Macau modifies satellite owner plan, rev share ban staysMacau modifies satellite owner plan, rev share ban stays May 13, 2022
  • China bars 90,000 from travel in cross-border bet actionChina bars 90,000 from travel in cross-border bet action May 13, 2022
  • Macau GGR tax cut may spur 15pct EBITDA hike: JP MorganMacau GGR tax cut may spur 15pct EBITDA hike: JP Morgan May 16, 2022
Copyright 2014-2022 TEAM Publishing and Consultancy Ltd / All rights reserved
  • Code of Ethics
  • Privacy Policy
  • Useful Links
  • Contact Us