Texas billionaire businessman Tilman Fertitta is considering taking out a significant chunk of his casino and restaurant businesses to take advantage of the recent rally in equity markets, Bloomberg reported Tuesday.
Citing people with knowledge of the matter, the business media outlet noted that Mr. Fertitta has yet to make a decision and that discussions on a possible public offering for sale are in the preliminary stages.
Mr. Fertitta is the owner of the Golden Nugget casino empire. The company owns and operates five casinos in four US states He runs two gambling venues in Nevada, one of which is in Las Vegas, one property in New Jersey, one in Mississippi and one in Louisiana.
The entrepreneur’s parent company, Fertitta Entertainment, also includes Landry’s Inc., Houston-based – a multi-brand restaurant corporation that has companies like the Landry’s Seafood chain, Joe’s Crab Shack, and the Bubba Gump Shrimp brands operating under its umbrella.
What could an IPO include?
According to sources familiar with the ongoing discussions, an IPO could include several Golden Nugget casinos and several restaurants run by Landry’s that would see the company. valued at several billion dollars. One person said that Mr. Fertitta would maintain control of his company through a stake of more than 50%.
The IPO would not include other assets owned by the Texas billionaire, such as the NBA franchise Houston Rockets.
Fertitta has depended over the years heavily out of debt to grow its many companies. However, the Covid-19 pandemic and the disturbances it has been causing has forced the businessman to seek other sources of funds in order to keep his business empire afloat.
In June, Mr. Fertitta announced that the online gaming arm, Golden Nugget Online Gaming, could Go public through a merger with the blank check company Landcadia Holdings II Inc. The businessman founded the special purpose acquisition company together with Jefferies Financial Group Inc. last year.
Last week, the SPAC merger obtained approval from New Jersey gambling regulators, but is still subject to shareholder approval and other conditions.
Thousands of workers laid off
Mr. Fertitta laid off 45,000 workers in March, when the pandemic had just hit, and said it had learned from previous financial meltdowns that it shouldn’t delay cutting jobs. He explained that “he is doing his people a favor if he leaves them without permission first, because he has them first in the unemployment line after the compensation he gives them.”
The massive cuts helped its casinos and other business ventures somehow absorb the impact of the Covid-19 crisis better than originally expected, people close to the businessman told Bloomberg.
As mentioned above, listing a stake in some of your businesses could allow the billionaire entrepreneur to take advantage of the growing investor appetite for new share offerings. This, in turn, could help Mr. Fertitta pay off the debt.