Caesars buyout in low-to-mid-$30s ‘achievable,’ says JPMorgan

JPMorgan thinks a potential takeout of Caesars (CZR) in the low-to-mid-$30s per share is “rational and achievable through several deal structures.” The shares have been trading at a 20% free cash flow yield as investors have focused more on risks than on Caesars’ strong cash flow generation, the analyst tells investors in a research note. JPMorgan believes the market is ascribing a 55% deal probability. It expects an update in the coming weeks as Fertitta’s 45-day exclusivity period nears its end. The three takeout scenarios, according to the firm, are a management-led buyout with $2B from an equity sponsor and and traditional debt financing, a management-led buyout with $2B from an equity sponsor and additional financing from a full sale/leaseback, a leveraged buyout by Fertitta Entertainment. JPMorgan has an Overweight rating on Caesars with a $35 price target