By Brenton Cordeiro and Stephen Lacey
Feb 6 The pricing of the initial public
offering of Caesars Entertainment Corp, one of the largest
casino operators in the United States and owner of the famed
Caesars Palace, has been delayed due to a "technical glitch," an
The delay resulted from last-minute comments the
underwriters received from regulators relating to the IPO
The banks were expected to price the offering on Monday
evening, but are now hoping to price on Tuesday with the goal of
opening trading on the Nasdaq sometime in the afternoon,
according to sources close to the process.
If they are unable to price by mid-afternoon, the banks are
likely to push off pricing until after the close on Tuesday for
Wednesday trading, the sources said.
Credit Suisse and Citigroup are leading underwriters on the
The company plans to sell 1.8 million shares in its IPO at
between $8 and $10 each. Pricing is likely to come within the
The shares being offered by Caesars make up just 1.4 percent
of the company's total float. It expects net proceeds of $13.1
million from the IPO, based on the midpoint of the expected
Certain shareholders, including hedge fund Paulson & Co that
owns 9.9 percent of Caesars, have registered to sell up to
$223.4 million of the stock they own in Caesars in additional
Caesars' private equity owners Apollo Global Management LLC
and TPG Capital LP, would continue to hold 70.1
percent of the company after the offering, according to filings
with the U.S. Securities and Exchange Commission.
Caesars' $31 billion leveraged buyout by Apollo Global and
TPG Capital in 2008 left the company severely debt-laden. It had
about $22.5 billion of outstanding debt on its books as of Sept.
At the high end of the estimated price range, Caesars would
have a market value of about $1.25 billion, a fraction of the
price tag it commanded when it was taken private.
"We view the Caesars IPO as unattractive due to the
company's concentration of revenue and cash flow in the
unattractive U.S. casino industry, its lack of exposure to the
attractive Asian casino industry, its highly leveraged balance
sheet, and valuation concerns," Morningstar analyst Chad Mollman
Caesars, had filed for an IPO in 2010 under its former name,
Harrah's Entertainment, but had to ditch the plans as the
company's debt became too much for investors to handle.
Caesars posted a net loss of $467 million on net revenue of
$6.66 billion, for the nine months ended Sept. 30.
Caesars operates 52 casinos, mainly in the United States and
England, and also owns a golf course in Macau - the world's
largest gambling destination.