Caesars Casino is Valued at $1.13 Billion After IPO

Posted on February 8th, 2012

Another day, another billion dollar valuation. Caesars Casino Group (Caesars Entertainment Corp) has had a price tage of $1.13 Billion stuck on it by the market following its IPO.
Caesars Casino has more than $22 billion in debt, mind. The Las Vegas-based group went private in a $30.7 billion buyout by Apollo Global Management LLC and TPG Capital 3 years ago.
Around 1.8 million shares went up for sale at $9 a share to collect around $16 million, a small figure- basically the ideas was to give investors the opportunity to cash out if they wanted. The accounts for less than 1.5% of the stock. The stock start trading publicly on Wednesday.
Rumour has it that around a fifth of the company could be sold by private investors – so if you fancy a punt, now could be a good time to get in. (Watch those debt levels though). The trading symbol for the group will be CZR.
Caesars did try and get away an IPO in 2010 for over $500m, but had to abort. The hedge fund run by John Paulson should now have a chance to exit and return cash to investors. (The fund owns around 10% of the company). Other backers include Goldman Sachs, Deutsche Bank, Apollo and TPG. The company’s takeover took place in the heady days of 2006 during a buyout boom. Harrah’s Entertainment Inc., as it was then called, traded on the New York Stock Exchange under the symbol HET until 2008.
The one big gap with the company is its absence from Macau, now the world’s largest gambling market, where it competitors Las Vegas Sands Corp. and Wynn Resorts Ltd. make the boat load of money.
So a punt on Caesars stock is basically a punt on the US economy. If you think it is going to return to the good times, then Caesars stock should follow. And bearing in mind that the US GDP grew at annual rate of just shy of 3%  in Q4 2011, this might not be a bad assumption.
As ever with shares, just like roulette, it’s always a bit of a gamble. The only difference with the stock market is that you can kid yourself that you are making an informed decision rather than punting your money on red!

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