Take-privates Reveal Wide Valuation Gap in Gaming

Billionaire Tilman Fertitta completed an all-cash, $31-per-share take-private of Caesars on May 28, valuing the company’s equity at about $17.6 billion and its enterprise value near $30 billion, driven by roughly $24 billion of debt. Barry Diller’s People Incorporated has proposed $48.30 a share for MGM Resorts, valuing the company at about $18 billion on an enterprise basis; People Inc. already held a 26.1% stake. Bally’s acquired Evoke, the owner of William Hill and 888casino, in a deal that closed at a large premium to recent trading levels.

Equity research analyst Jordan Bender of Citizens noted a persistent disconnect between public and private market prices: “For years, gaming companies traded at depressed valuations, creating a meaningful disconnect between public and private market values.” He described recent take-privates as buyers acting on that gap.

Citizens’ analysis shows People Inc.’s $48.30 offer is about a 24% premium to MGM’s 30-day volume-weighted average price and more than a 30% premium to its 90-day average. Bally’s acquisition of Evoke completed at roughly a 138% premium to the price before Evoke launched a strategic review on December 9, 2025, and about 77% above prices before acquisition speculation in April 2026.

Bender expects limited changes to day-to-day operations at the acquired firms, saying management teams have shown operational strength. He identifies potential value creation from synergies such as cross-selling and shared customer databases rather than widespread management changes. He also highlighted higher financing costs as a constraint on broader consolidation.

Chad Beynon, Head of US Research at Macquarie Capital, called the current market attractive to value buyers and pointed to the industry’s free cash flow as a draw. Macquarie estimates Bally’s deal is strongly accretive, projecting combined free cash flow per share to rise from about €0.20 to €0.32, roughly a 60% increase. The acquisition structure extinguished Evoke’s 470 million shares while Bally’s issued about 252 million new shares, a mechanics-driven mismatch that concentrates the acquired cash flow among existing Bally’s shareholders. Macquarie’s pro forma model shows NewCo with about €680 million of free cash flow on roughly €3.2 billion of combined revenue.

Recent reported operating metrics show Caesars’ first-quarter 2026 free cash flow at $392 million on $2.9 billion of revenue, a 13.5% FCF margin. MGM’s first-quarter FCF was about $413 million, a margin near 9.3%. Nearly half of Caesars’ EBITDAR and more than 60% of MGM’s EBITDAR derive from Las Vegas operations.

Private equity and strategic buyers have been active in gaming in recent years, including transactions involving parts of IGT, Everi, Evolution AB and Aristocrat. Analysts say the latest offers provide valuation reference points for activists, insiders and private investors assessing targets, and note that elevated interest rates and debt levels remain headwinds for larger consolidation.