Trump Report Raises Caesars Stock

News that developer Donald Trump may attempt to buy a controlling interest in Caesars World Inc. sent the hotel and casino company’s stock price sharply higher on heavy volume today.

Caesars World announced late Tuesday that Trump filed for government antitrust approval to buy up to 50% of the Casino concern. In the notice, Trump said he might seek control of Caesars through the purchase of 50% or more of its outstanding voting stock, the company said.

Caesars World stock price rose $3.875 to $29.125 a share on heavy volume this afternoon in New York. At its current price, the company is worth about $740 million, but any takeover bid would probably boost the stock price.

“He (Trump) agrees that the stock is undervalued,” said analyst Daniel Lee of Drexel Burnham Lambert.

Industry analysts note that the stock is selling below par for the industry, possibly because of concern over an increasing number of casinos in both New Jersey and Nevada.

Caesars World is the market leader in the Nevada casino industry, with its flagship Caesars Palace casino famed as a venue for big gamblers and major boxing matches.

Trump is already active in the Atlantic City casino market, and a takeover of Caesars would force him to sell one of his operations.

He owns two major casinos there, the Trump Plaza hotel and casino and the Trump Castle hotel and casino. He is in the process of building the giant Taj Mahal, due to open in 1990.

Under New Jersey law, one operator can have only three casinos, and Caesars already has a highly profitable casino on the boardwalk.

For its fiscal year ending July 31, Caesars World reported earnings of $77 million, $2.90 a share, on revenues of $833 million.

Its third casino, Caesars Tahoe, is located in Lake Tahoe, Nev.