Caesars Entertainment: According to a report from the Wall Street Journal, Tilman Fertitta has been in exclusive talks to buy Caesars Entertainment (Snr Sec: Ba3/BB-/NR; Sen Unsec: B3/B-/NR) for ~$7 bn. According to people familiar with the matter, Fertitta’s company, Fertitta Entertainment, has been discussing paying around $34/share for CZR, above a competing all-cash offer from Carl Icahn at around $33/share. An announcement between the two sides isn’t imminent and it is possible talks won’t result in a deal. Caesars has also not officially rejected the offer from Icahn.

We have yet to see details on how exactly a Fertitta takeover would be structured, and more importantly if a takeover would avoid a Change of Control (CoC).

As highlighted in our initial look at the takeover rumors (see Caesars: Takeover Rumors Swirl), the Permitted Holder definition includes the Management Group. The WSJ report notes that CZR’s CEO, Tom Reeg, would likely be involved with either the Fertitta or Icahn bid. This could signal a management-led takeover structure that aims to avoid the CoC. According to our sister company, Covenant Review, there are also a number of other potential CoC workarounds.