Analyst questions Harrah's motives for regulatory filing

16 August 2010

LAS VEGAS, Nevada -- A regulatory filing by Harrah's Entertainment to publicly list a billionaire investor's 9.9 percent stake in the company could test the waters for the privately-held casino operator's own initial public offering.

KDP Investment Advisors bond analyst Barbara Cappaert told clients Harrah's won't receive any financial proceeds from the listing for New York-based hedge fund Paulson & Co., which acquired an interest in Harrah's in exchange for $710 million in debt.

The S-1 filing with the Securities and Exchange Commission late Thursday was first thought to be a much-rumored initial public offering by Harrah's, which was taken private two years ago in a $29 billion private equity buyout.

"So what does this mean for Harrah's?" Cappaert wrote. "It certainly tests the market as to what Harrah's is worth but it is curious that the company does not think an all out IPO for company raised shares can be done."

The analyst said the moves "bears watching" and she speculates that Harrah's majority owners, Apollo Management and TPG Capital, may follow through and put some of their holdings on the market.

"Are they concerned about Harrah's prospects down the road later and are willing to cash out now?" Cappaert said. "It certainly would appear to be the case."

Harrah's operates the Harrah's, Caesars and Horseshoe casino brands, the World Series of Poker and an online gaming business in the United Kingdom. The company has nine casinos along the Strip, including the Rio.

Harrah's also has more than $19 billion in long-term debt and the company has taken measures to lower its debt load and interest expenses.

Cappaert isn't sold on the Paulson move.

"This is not enough to have us upgrade our ranking on Harrah's, particularly after the poor second quarter the company just reported," Cappaert said. "Instead, its just another headline that appears promising but in fact does nothing to deliver an already overleveraged gaming company."

Related Links
Nevada Online Gambling
KDP Investment Advisors Gaming Vendor Information


Copyright GamingWire. All rights reserved.
Featured Vendors
Prezzee
Casino Schedule Ease
Prezzee
Prezzee provides digital gift cards from top brands to reward loyal guests and employees.
Casino Schedule Ease
Full Featured & customizable for the complex scheduling needs of table games & other casino depts
Texas Slots & Gaming
Regulatory Management Counselors, PC
Texas Slots & Gaming
Wholesale gaming reimagined. Texas Slots & Gaming is your sustainable gaming partner.
Regulatory Management Counselors, PC
Over 45 years of experience serving the legal and regulatory needs of casino industry clients
Oklahoma Indian Gaming Association (OIGA) Conference
Rymax Marketing Services, Inc.
Oklahoma Indian Gaming Association (OIGA) Conference
The biggest little show in Indian gaming! Save the date: July 14-16, 2025 Oklahoma City
Rymax Marketing Services, Inc.
Leader in creating award winning player & employee loyalty programs & events proven to increase ROI
Slot Machines Unlimited
Casino City Press
Slot Machines Unlimited
Exporter of IGT, Williams, AVP, Trimline, Aristocrat, Konami, Bally, & parts over 20 yrs experience
Casino City Press
A leading publisher and distributor of casino and gaming business data and market research reports.
Sunkist Graphics, Inc.
Betson Imperial Parts & Service
Sunkist Graphics, Inc.
Specializing in the creation of best-of-breed gaming graphics - slot glass, sign faces, and more
Betson Imperial Parts & Service
Your one stop shop for all your gaming and OEM needs!
REDW Business & Financial Resources, LLC
TribalHub
REDW Business & Financial Resources, LLC
Improve Your Odds of Success: Trust in REDW’s Tribal Casino Operations & Audit Experts!
TribalHub
26th Annual TribalNet Conference Sept 15-18, 2025 at Grand Sierra Resort and Casino in Reno, Nevada
Casino Network
Concept 3, LLC
Casino Network
20+ years experience selling refurbished slot machines, parts & glass for all major brands
Concept 3, LLC
Custom Creations, Unmatched Value – Elevating Brands with Quality & Savings Since 2004
Imagine This
Imagine This
Imagine This #1 Source for Player Gifts. Over $50 million in stock ready to ship! Let us serve you!


Your Guide to 14,985 Gaming Industry Suppliers