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Breakingviews: Curious Caesars

Wednesday, April 24, 2013 - 03:22

April 24 - Richard Beales and Jeff Goldfarb examine the U.S. casino group's latest restructuring experiment and wonder if regular investors can see through its complexity.

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This season as big US gambling company was subject to the giants that he will billion dollars LB back in 2006. Struggled ever since through the Great Recession. Tried IPO try to pay twice raised just a tiny bit of money. Latest effort to buy some time just looks like he really silicone believed -- have -- to -- -- that's. Pounds -- -- Wednesday -- financial engineering there's. It's seriously what they've done is about a year after they've they've went public -- of this tightening IPO they sold less than one and a half percent of the company to -- market. They're basically carving out a bunch of the assets. Setting up a separate company that's owned by holding company to which existing shareholders will get rights to bond not even quite a -- -- -- to -- you get it right you know to. -- answer given by aliens in this which it is gonna howls a couple of casinos and also. I guess -- -- the integral part of it is the online operations which you know haven't been Wisconsin promises. Of online gambling in the United States which is starting to inch forward a little bit to the states. It's saving the capital structure really right now for another for a period of time because. Civil and raises a little bit of money billions of some -- -- go to bank to seizes the highly leveraged thing that's -- -- fooled them that. Yeah -- a little bit let less than total little cash urgently look at -- this thing. Grace. -- -- a lot of people have looked out considerably less leverage of course and presumably it will then be a vehicle for growth of whatever variety could be -- the problem has been that. For these guys that sunk six billion dollars of equity into caesar's 2006. We have these -- NASA to visit. I ask all the Arabic god is being chewed up to pay for the interest on the Brett they've been waiting for the return of gambling Las Vegas tourism right. Online gambling all these things that were supposed to help. Get the company back on its feet just haven't been Cummings of the this is sort of like you'll put the next step in trying to prolong the life infrastructure that debt they've. If you -- you know they try to -- he ought to try all kinds of things that it's received -- investors and this is Romania and -- -- too politically Japanese and some other insiders -- visit there as of briefly but is not -- it's time that we know that the driver goes only to have to looks at what's at a regular. Investors thing clicking it does that mean at some of what happens in the market reacted very positively to us I guess because. There's this it's like a sigh of relief almost that obesity is a little bit of breathing room right. But it does feel like I mean this kind of structure with rights issues on a spin off. Is unusual I haven't seen it before you know when you see that kind of level of engineering in a situation that's already pretty bad -- I personally couldn't start to worry a little bit that now the one -- also that the parent company. And give us we'll keep an economic -- a pretty big economic stake in Verizon it spun off vehicle. So there is upside there than not you know and obviously being forced to divested assets and -- huge way. So that you have some value there I know just be I guess a little bit cautious. -- -- -- -- We'll keep on this seizes gamble experiment. With which to be proven. Think of it as and we level breaking views toward.

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Breakingviews: Curious Caesars

Wednesday, April 24, 2013 - 03:22