Sosnoff Loses a Round in Struggle for Caesars : Fails to Oust 4 Key Management Figures, but Continues Fight to Increase Stock Holdings

Martin T. Sosnoff has lost his effort to oust four top management figures from the board of Caesars World, but there was no sign Wednesday that he will call off his unsolicited tender offer for its stock.

The next business on the agenda for the Los Angeles-based casino operator is a special stockholders meeting here June 12 to vote on its own $960-million recapitalization proposal.

In effect, shareholders will choose at that time between the company’s plan and Sosnoff’s offer. The New York-based money manager has offered $32 a share to increase his holding to 92.4% from 13.9%.

Caesars World’s management has opposed Sosnoff’s offer and countered with its own plan, which includes a $26.25-a-share cash dividend plus shares in a highly leveraged successor company.

The company put out a brief press release Wednesday pointing out that the deadline on Sosnoff’s mail campaign to oust the four inside directors had passed Tuesday without his presenting the company any written consents from stockholders.

A Sosnoff spokesman said he had no comment on the situation. However, a source close to Sosnoff’s campaign said it would be “fair” to infer that he had not acquired the necessary majority to prevail. But, the source said the main economic issue--the two proposals--remains up for a stockholders’ decision.

Caesars, which owns three casinos in Nevada and New Jersey, said in a separate release Wednesday that it has been informed that the regulators of both states will review both the recapitalization proposal and Sosnoff’s offer at special meetings next month.

The New Jersey Casino Commission tentatively set its meeting for June 16.

The Nevada Gaming Control Board is to have a special meeting June 10 to review the two aspects of the recapitalization that require the state’s approval. They are the reincorporation of the company in Delaware and, if required by lenders, its pledge of subsidiaries’ stock to secure part of the financing.

The control board’s recommendation is tentatively set to be taken up by the Nevada Gaming Commission on June 18. The company said it was informed that the Nevada authorities also “currently intend” to review Sosnoff’s offer simultaneously with the company’s recapitalization plan.