Harrah's Boosts IPO to $610.9 Million, Changes Name
Harrah’s Boosts IPO to $610.9 Million, Changes Name
Nelson Ching/Bloomberg
The Imperial Palace Hotel and Casino, owned by Harrah's Entertainment Inc., in Las Vegas.
The Imperial Palace Hotel and Casino, owned by Harrah's Entertainment Inc., in Las Vegas. Photographer: Nelson Ching/Bloomberg
Harrah’s Entertainment Inc., the world’s biggest casino company, boosted its planned initial public offering to raise as much as $610.9 million and will change its name to Caesars Entertainment Corp.
The company plans to sell 31.3 million shares this month, priced at $15 to $17 each, according to a regulatory filing today. The offer includes an option to sell another 4.69 million shares. The stock will trade on the Nasdaq under symbol “CZR.”
The stock being sold by the company is in addition to $710.3 million of shares registered for sale by John Paulson’s Paulson & Co. hedge fund. He agreed in June to acquire almost 10 percent of Las Vegas-based Harrah’s by swapping bonds bought at a discount. The resort owner said on Oct. 18 its IPO would raise as much as $575 million for projects in Las Vegas and Ohio.
Harrah’s, taken private in January 2008, is tapping public markets as a record slump in Las Vegas eases and casino securities rally. Las Vegas Strip gambling revenue jumped 21 percent in August, Nevada’s Gaming Control Board said.
Harrah’s 10 percent secured bonds due in December 2018 rose 3.25 cents to 92.75 cents on the dollar as of 11:31 a.m. in New York, the highest on record, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The securities, which traded as low as 72.5 cents on the dollar on Feb. 10, jumped the most since June 4.
Consumer Spending
“Visitation also increased slightly in certain markets, including Las Vegas, and there are signs consumer spending may be stabilizing,” Chief Executive Officer Gary Loveman said today in a separate statement. The company is continuing to cut costs, targeting another $129 million in savings in the fourth quarter, he said.
Harrah’s today reported a narrower third-quarter loss, the result of smaller asset write downs.
The net loss shrank to $164.8 million from a loss of $1.62 billion a year earlier, Harrah’s said today in a regulatory filing. Sales were little changed at $2.29 billion. Harrah’s booked costs of $44 million for to reflect the declining value of some assets, compared with $1.33 billion a year earlier.
Cash flow, or property earnings before interest, taxes, depreciation and amortization, slid 10 percent to $505.6 million.
Harrah’s scooped up the Planet Hollywood Resort & Casino from default in February, gaining a Las Vegas Strip property next to its other resorts for less than it would cost to build.
Harrah’s plans to use the IPO proceeds to finish its 660- room Octavius Tower at Caesars Las Vegas, develop the LINQ retail and entertainment area next to the Flamingo on the Las Vegas Strip, and invest in the potential joint-venture development of two Ohio casinos with Rock Gaming LLC, the company said last month.
Harrah’s has cut more than $4 billion in debt in the past two years by offering creditors new bonds at a discount for their old notes, buying back other debt for less than face value and extending maturities on $5.5 billion in loans.
Leon Black’s Apollo Management LP and David Bonderman’s TPG Inc. took Harrah’s private for $30.7 billion, including debt and transaction costs, in January 2008.
To contact the reporter on this story: Beth Jinks in New York at bjinks1@bloomberg.net
To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net
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