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
Caesars Entertainment Ownership Details
Nevada Gambling


Copyright GamingWire. All rights reserved.
Featured Vendors
Kallop
TDN Money Systems
Kallop
Reward every play like a VIP with exclusive luxury brands at affordable prices.
TDN Money Systems
Cage, cash/chip handling experts representing CountR, ARCA, AccuCASH, Fujitsu & NCR
Betson Imperial Parts & Service
Sunkist Graphics, Inc.
Betson Imperial Parts & Service
Your one stop shop for all your gaming and OEM needs!
Sunkist Graphics, Inc.
Specializing in the creation of best-of-breed gaming graphics - slot glass, sign faces, and more
TOP ONE TECH LIMITED
Slot Machines Unlimited
TOP ONE TECH LIMITED
GLOBAL TOUCH SOLUTION PARTNER OF CHOICE,10+ years OEM manufacturing,100+ thousand units application
Slot Machines Unlimited
Exporter of IGT, Williams, AVP, Trimline, Aristocrat, Konami, Bally, & parts over 20 yrs experience
AmericanChecked
Rymax Marketing Services, Inc.
AmericanChecked
Background checks for the gaming industry with key & non-key packages & fingerprinting solutions
Rymax Marketing Services, Inc.
Leader in creating award winning player & employee loyalty programs & events proven to increase ROI
RSA Executive Search
Casino Schedule Ease
RSA Executive Search
A Boutique Search firm specializing in the Recruitment of Hospitality and Gaming Entrepreneurs
Casino Schedule Ease
Get a 90-Day Free Trial of 100% contactless, customizable table game & full casino scheduling
Broadband Hospitality
Casino Network
Broadband Hospitality
Improve these critical guest-facing amenities: In-room TV, Wi-Fi, Mobile App. Priced right. All here
Casino Network
20+ years experience selling refurbished slot machines, parts & glass for all major brands
DFI
Imagine This
DFI
The latest industry tech in slot and VLT motherboards, embedded systems, industrial panels
Imagine This
Imagine This #1 Source for Player Gifts. Over $50 million in stock ready to ship! Let us serve you!
TribalHub
.Dot-iGaming.com
TribalHub
22nd Annual TribalNet Conference & Tradeshow Nov 8-11, 2021 Gaylord Texan Resort, Grapevine TX
.Dot-iGaming.com
Fully loaded advanced casino platform. One time (low) fee, 100% your property, start now!
Oklahoma Indian Gaming Association (OIGA) Conference
Casino City Press
Oklahoma Indian Gaming Association (OIGA) Conference
The biggest little show in Indian gaming! Save the date: Aug 9-11, 2022 in Tulsa!
Casino City Press
A leading publisher and distributor of casino and gaming business data and market research reports.


Your Guide to 15,515 Gaming Industry Suppliers