Casino giants MGM and Caesars Entertainment are mulling the possibility of a merger, according to a report Tuesday.
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The New York Post reported MGM has hired investment bank Morgan Stanley and law firm Weil, Gotshal & Manges to research the possibility of the transaction. Activist investors at Caesars are said to support a merger.
The report comes days after Caesars Entertainment said CEO Mark Frissora would step down from his post in February. Caesars rejected a merger offer from Golden Nugget Casinos magnate Tilman Fertitta last October.
“Everyone knows that without a CEO, Caesars is in play,” a source familiar with the situation told the Post.
Shares of MGM and Caesars Entertainment were both down slightly in trading Tuesday. Caesars shares are down more than 20 percent so far this year, while MGM shares are down more than 15 percent.
MGM declined to comment on the report. Caesars did not immediately respond.
A merger would grant the combined MGM-Caesars control of roughly half the hotel rooms in gambling hubs Las Vegas and Atlantic City, the Post reported.