Harrah's IPO Return, As Caesars Entertainment Corporation (CZR)

This will not be a shock to many investors and it has been a highly telegraphed deal. Harrah’s is coming public, again.  Harrah’s Entertainment, Inc. has announced that it has commenced an initial public offering of 31,250,000 shares of common stock.  The company will list under the name Caesars Entertainment Corporation and will trade under the “CZR” ticker on the Nasdaq Global Select Market.

All shares included in the IPO are being sold by the company, and the expected price range is $15 to $17 per share.  At the mid-point and assuming no overallotment shares, this will raise some $500 million.  The Company intends to use the net proceeds from the offering to fund a near-term pipeline of growth projects and for general corporate purposes.  The share count after the offering is listed as 337 million shares, implying a market cap without other debt or without other stock considerations at the mid-point of the range

Citi, Credit Suisse Securities (USA), BofA Merrill Lynch, Deutsche Bank, and Goldman Sachs are all listed as the joint bookrunners for the IPO.  The underwriters are being granted a 30-day overallotment option to purchase up to an additional 4,687,500 shares of common stock on the same terms and conditions as the IPO terms.

The company’s loss narrowed to roughly $165 million as revenue grew less than 1% to $2.29 billion including the Planet Hollywood resort acquisition, but the company is still very leveraged.  The growth may have come from visitors, but the direct casino portion of the revenue was down about 2.1%.

Its 2008 private equity buyout by TPG and Apollo Management was close to a $27.8 billion deal.  It is also listed that Paulson & Co. will be selling 30.2 million more shares.

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JON C. OGG