Shi Yuzhu led consortium eyes Caesars Interactive acquisition

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Shi Yuzhu

Bloomberg Technology has reported that a Chinese consortium led by tech billionaire Shi Yuzhu (Founder of Giant Interactive Group) is in talks to acquire Caesars Interactive from Caesars Entertainment Corp (CEC).

The Yuzhu-led group has entered negotiations with CEC governance following an auction process with CEC targeting a $4 billion valuation for its asset.

Undisclosed deal insiders have stated that the consortium has been granted a grace period in which to make its offer for Caesars Interactive, one of CEC group’s top performing divisions.

This May, following pressure from creditor groups to restructure its corporate debt attached to its ‘Caesars Entertainment Operating Company’ (CEOC) unit, CEC governance had called for the assistance of Raine Capital to lead the bid process for Caesars Interactive.

Created through a series of corporate acquisitions, CIE operates Playtika social/mobile gaming brands Slotomania, Bingo Blitz and online poker asset alongside CEC digital properties (Caesars’ Bingo and Casino).

Led by former Party Gaming PLC CEO Mitch Garber, CIE has become a leading operator in the social and mobile gaming space with a reported $800 million sales combined with $280 million in earnings for 2015.

Aiming to sooth creditor concerns, in its latest debt-plan CEC governance announced that it would pledge a guaranteed $4 billion in CEOC debt repayments.

Shi Yuzhu’s Giant Group is currently China’s market leader in online games (12% market share – BNP Paribas). Industry insiders speculate that Yuzhu is keen to expand his firms presence in Western markets, eyeing expansion through corporate acquisitions.

As yet it is unknown whether if successful in pursuit of Caesars Interactive the consortium will move to integrate Caesars Interactive assets directly with Giant Group’s portfolio.

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