Bloomberg News

Caesars Rises on Plan to Sell Stake in Online, New Casinos

February 04, 2013

Caesars Entertainment Corp. (CZR:US), the largest owner of U.S. casinos, rose the most in almost two months after saying it may raise money by selling a stake in its online operation and two other properties.

Caesars Growth Venture Partners will include Caesars Interactive Entertainment shares, the Planet Hollywood resort in Las Vegas and a project under way in Baltimore, the Las Vegas- based company said today in a filing (CZR:US). The unit would also own a $1.1 billion note issued by a Caesars subsidiary.

Caesars Entertainment, controlled by Apollo Global Management LLC (APO:US) and TPG Capital LP, said the sale may bolster its cash and improve its credit rating. The parent, with almost $23 billion in debt, will keep a “significant portion” of the venture, according to the filing. The announcement was made in conjunction with a debt offering.

“We are pursuing this transaction because we believe it will improve our liquidity and credit profile, enhance our distribution network and provide additional support for potential new ventures,” the company said in the filing.

Caesars rose 12 percent $8.71 at the close in New York, the biggest gain since Dec. 6. The shares had advanced 26 percent this year.

Apollo Management and TPG Capital own about 70 percent of Caesars stock. Paulson & Co. holds about 10 percent.

In the filing (CZR:US), Caesars proposed selling $1.5 billion in senior notes, due in 2020, at a 9 percent rate. Proceeds will be used to repay outstanding term loans, the company said.

As part of the filing, the company also reported preliminary fourth-quarter results.

Quarterly Results

Sales for Caesars Entertainment Operating Co. totaled $1.55 billion to $1.58 billion, the company said in the filing. Earnings before interest, taxes, depreciation and amortization totaled $325 million to $365 million.

The results topped estimates of $1.52 billion and $315 million by Barbara Cappaert, an analyst with KDP Investment Advisors Inc., and came as Caesars’ Atlantic City casinos closed for five days during Hurricane Sandy last year.

Caesars sold shares to the public in February 2012 at $9 each. The company was taken private in a $30.7 billion leveraged buyout by Apollo Global Management LLC and TPG Capital in 2008.

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net


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Companies Mentioned

  • CZR
    (Caesars Entertainment Corp)
    • $16.84 USD
    • -0.14
    • -0.83%
  • APO
    (Apollo Global Management LLC)
    • $27.36 USD
    • -0.26
    • -0.95%
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