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Caesars Entertainment Corp. (CZR - Get Report) shares extended gains Friday, taking their week-to-date advance past 10%, amid fresh reports of a merger deal involving the iconic casino operator and its activist investor Carl Icahn.

Rival Eldorado Resorts Inc. (ERI - Get Report) is nearing an agreement with Caesars that could see the pair combine to create a gaming group worth more than $7.4 billion, multiple media outlets have reported, following pressure from Icahn, who boosted his stake in the group to 17.75% earlier this year, to push for either a sale or the merger of the group.

Caesars shares were marked 4.3% higher at the start of trading Friday to change hands at $9.52 each. That would take the stock some 12% higher for the week and extend its year-to-date gain past 38%. 

Eldorado shares were marked 3.2% higher at $51.38 each, a move that would extend its year-to-date gain to around 36% and value the Reno, Nevada-based group at around $5.2 billion.

Since first revealing his holding in Caesars in March, Icahn has moved to oust former CEO Mark Frissora and replace him with the deal-focused Anthony Rodio, who quickly orchestrated a tie-up with Walt Disney Co. (DIS - Get Report) that will see an ESPN studio erected in the LINQ Hotel & Casino for the production of sports-betting content in the wake of last year's move by the U.S. Supreme Court to overturn a federal on sports wagering. 

Caesars has also been linked to a merger with U.K.-based William Hill WMH, which, according to a piece in last week's Sunday Times newspaper, was preparing a £6 billion tie-up with the Icahn-controlled group under CEO Philip Bowcock.