Caesars Entertainment Corporation (NASDAQ: CZR) shares were rallying Friday in reaction to a CNBC report that billionaire activist investor Carl Icahn may have taken a stake in the casino operator.

What Happened

Sources close to the matter told CNBC Icahn is accumulating shares in Caesars, which follows earlier reports of similar investments by activist hedge fund Starboard Value in MGM Resorts International (NYSE: MGM).

Icahn's potential involvement may be related to last year's offer from billionaire Tilman Fertitta to buy Caesars for $13 per share. Icahn could be looking for Caesars to fetch a higher acquisition offer from Fertitta or another buyer.

Why It's Important

Caesars stock had lost nearly 40 percent in the past year through Thursday's close despite some support from Street analysts.

For example, Credit Suisse said Caesars has an ideal position in the Las Vegas gaming market after renovating "long-neglected" assets and focusing on creating new convention space.

What's Next

Icahn's potential involvement in Caesars stock has yet to be confirmed. The activist investor and gaming operator did not immediately respond to CNBC's request for comment, the cable news channel said. 

Related Links:

Morgan Stanley: 6 Ways Caesars Entertainment Can Create Value

6 Reasons Why Deutsche Bank Is Bullish On Post-Bankruptcy Caesars Entertainment

© 2019 Benzinga does not provide investment advice. All rights reserved.

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