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Apollo, TPG-backed Caesars Entertainment files for IPO

16 Nov 2011

Private equity-backed Caesars Entertainment has revived plans to float on the public market, almost a year after it shelved the idea after the debt load from Apollo Global Management and TPG Capital’s $31bn leveraged buy-out (LBO) led to investor unease.

According to a recent filing with the US Securities and Exchange Commission (SEC), the company, which is one of the largest casino operators in the US and runs approximately 50 casinos including Caesar’s Palace, Flamingo and Rio in Las Vegas, is looking to raise $50m through an initial public offering.

Caesars Entertainment has floated a number of times in the past under different owners. In November 2010 it planned to offer 31.25 million shares at $15-$17 per share, which could have raised between $468.7m and $531.2m. However, plans were scrapped due to investor disquietude over the group’s debt burden.

Apollo and TPG took the company private in 2008 for $30.7bn, paying $90 per share. The LBO reportedly doubled Harrah’s debt, which stood at $19.8bn as of the six months ended June 30 2010.

The company has granted the underwriters a 30-day option to purchase up to an additional 4.6 million shares of common stock on the same terms and conditions. Hedge fund manager Paulson & Co was also hoping to sell a 30 million share stake in the company.

Earlier this month Apollo and private equity peer KKR each secured a $3bn mandate from US pension fund Teacher Retirement System of Texas, to invest across a variety of private market asset classes and fund investment programmes.

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