While the world waits for the Facebook IPO to launch, Caesars Entertainment, which owns casinos under the Caesars, Harrah’s and Horseshoe names, will begin trading today under the ticker symbol CZR on the Nasdaq exchange after pricing its IPO, initial public offering, at $9 a share. The shares had been offered at a range of $8 to $10.
Caesars was taken private in a $31 billion buyout by Apollo Global Management and TPG Capital in 2008. CZR’s revenues and bottom line plunged during the financial crisis and as a weak consumer economy hit the leisure and entertainment industries. Because of bad timing, Apollo Global and TPG Capital sponged billions of dollars in losses on their acquisition of Caesars.
The IPO offering, being organized investment banks Citigroup and Credit Suisse, will be for less than 2% of all the company shares, 1.8 million shares. CZR is expected to raise about $16 million, minus underwriting and listing costs. About 19% of the CZR shares, a portion currently held by investors like Paulson & Company, will be allowed to be sold to the public, with an additional 9% available in 180 days.
Caesars was known as Harrah’s Entertainment before going private. After Caesars went private, they restructured a huge pile of debt which was incurred during the takeover and is still climbing out of a financial hole. Caesars tried to go public in a $531 million offering but pulled the offering when market conditions proved financially unsanitary.
In CZR’s IPO prospectus, the company reported a loss of $467 million for the nine months ended Sept. 30, 2011, up from the period a year earlier, when it lost $634 million. As of Sept. 30, the company’s debt had a face value of $22.5 billion.
Vegas goes to Wall Street – Place Your Bets