Sosnoff Says He May Boost Offer for Caesars
New York money manager Martin T. Sosnoff disclosed Monday that he is prepared to make a “meaningful” increase in his $28-a-share bid for Caesars World if a friendly deal can be negotiated.
Sosnoff’s new position was made last Friday in letter to Chairman Henry Gluck of Caesars World, but the management of the Los Angeles-based casino firm went public Sunday with a counter-plan to borrow $1 billion and pay a $25-per-share special cash dividend to shareholders.
Caesars World management did not comment Monday on the communication from Sosnoff.
Meanwhile, the company’s stock rose $1.375 to close at $30.625 per share Monday on the New York Stock Exchange. It was the market’s first reaction to management’s plan to recapitalize and make the $750 million-plus payout to stockholders.
The $6.50 difference between the amount of the proposed dividend and Monday’s stock price provides the market’s rough indication of Caesars’ share value after the proposed recapitalization, which is subject to stockholder approval.
Sosnoff’s letter to Gluck sought to rebut the company’s allegations that he is unable to finance his offer and management’s claim that the bid is inadequate.
Marine Midland Bank of Buffalo, N.Y., has now delivered binding commitments assuring $500 million of acquisition financing, Sosnoff’s message said. Also, Paine Webber Inc., his financial adviser, has indicated that its placement of the securities to be used to raise the balance of the necessary financing is “well under way,” the message said, adding:
“Moreover, Paine Webber and Marine Midland have advised me that the financing needed to effect an acquisition at an enhanced price will be available to me in the context of a friendly, negotiated transaction.”
Sosnoff, whose message was included in a new filing Monday with the Securities and Exchange Commission, also disclosed that he was notified by telephone last Thursday that Caesars World “would be announcing in the near future a significant corporate transaction.”
The call was from Joseph Harsch, a managing director of Drexel Burnham Lambert in the investment banker’s Beverly Hills office, the filing said. It went on to say that Harsch called again on Sunday to tell him that the company was announcing its plan to recapitalize and distribute to its stockholders $25 cash per share.
