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Sosnoff Sweetens Offer in Caesars Takeover Bid

April 14, 1987|From Associated Press

New York investor Martin T. Sosnoff on Monday sweetened his unsolicited takeover bid for Caesars World Inc. by 14% to $32 a share, or $931.2 million.

At the same time, Sosnoff said in a letter to Caesars Chairman Henry Gluck that shareholders "will be best served by our entering immediately into good-faith, friendly negotiations."

Gluck had declined earlier negotiation offers, most recently last Wednesday, Sosnoff said.

Caesars' stock closed up 25 cents to $32.375 on the New York Stock Exchange.

Caesars spokesman Jack Leone said the company was studying Sosnoff's latest offer and had no further comment.

Caesars operates hotel-casinos in Las Vegas and Lake Tahoe, Nev., and Atlantic City, N.J., as well as Poconos resorts in Pennsylvania.

Five weeks ago, Sosnoff made his initial cash offer of $28 per share for all Caesars stock he doesn't already own. Sosnoff currently owns 12% of the company's stock on a fully diluted basis.

Caesars responded last weekend with a $1-billion recapitalization plan under which it would pay all shareholders special dividends of $25 per share. Shareholders would retain their stock. Debt incurred by the company's proposal would leave it with a negative net worth of about $700 million.

Under his new offer, Sosnoff would pay $32 per share in cash for 29.1 million shares of Los Angeles-based Caesars. With the 4.2 million shares he already controls, that would give Sosnoff 92.4% of the company.

If he succeeds in getting at least a majority through his tender offer, Sosnoff said, he would then cause Caesars to merge with his MTS Acquisitions, buying out the remaining shareholders for securities valued at $32 per share.

Sosnoff said he believes his revised proposal offers better value than the recapitalization plan.

He also disclosed that he has received commitments for $975 million in financing and has been advised by his lead banker that it is confident of arranging the final $25 million needed for the deal.

Sosnoff also indicated that gaming officials in New Jersey have begun the investigation process needed for regulatory approval and that he will meet this week with gaming officials in Nevada to expedite the process there.

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