Harrah Eyes $531.3 Million IPO And Plans to List Shares Under New Name
The debt-laden casino and entertainment company set an initial price range of $15 to $17 a share and plans to float nearly 31.3 million shares in the offering. That would generate $531.3 million if Harrah's can price its shares on the high end of the range.
Harrah's has struggled under a heavy debt load since it was taken private in 2008 by Apollo Management and TPG. The company says it plans to use the net proceeds for "near-term pipeline of growth and for general corporate purposes." Harrah's is banking on growth in Las Vegas and Ohio, as it faces a new challenger in Vegas with the upcoming Cosmopolitan Resort.
Harrah's also announced it will list its shares on the Nasdaq under Caesars Entertainment with a ticker symbol of CZR.
The company also released its third quarter results on Friday. Revenues were largely flat, inching up 0.3% to $2.29 billion in the quarter compared to the same time a year ago.
"Revenue rose slightly during the third quarter," said Gary Loveman, Harrah's Entertainment CEO, in a statement. "Although visitation also increased slightly in certain markets, including Las Vegas, and there are signs consumer spending may be stabilizing, we're continuing to exercise cost discipline while pursuing innovative ways to provide rewarding customer experiences. We have targeted $129 million in additional expense reductions for the 2010 fourth quarter.
During the third quarter, Income from operations, prior to impairment charges, fell to $219.7 million, compared with $278.4 million a year earlier. Harrah's attributed the decline to increased marketing and labor-related expenses.
As the company looks for growth in the near future, it pointed to its earlier announcement of a retail, dining and entertainment development project in Las Vegas, the completion of a new 660-room hotel tower at Caesars Las Vegas and a potential joint venture with Rock Gaming to build casinos in Cleveland and Cincinnati, Ohio.