William Chambers* Casino giant Harrah’s has confirmed its plans to rebrand as Caesars Entertainment Corporation ahead of a US$500 million public offering of stock. The world’s largest gambling operator by revenue reported what could be its last results under the Harrah’s brand name late last week as it simultaneously released its prospectus for the public offering of 9.3 percent of the company. The offering will be for 33.25 million shares, which will be listed on the Nasdaq Global Select Market under the Caesars brand for between US$15 and US$17 apiece. The company said it expects the public offering to raise approximately US$469.4 million based on the sale of stock at a mid-point value of US$16 a share. The sale of stock will mean that 9.3 percent of the company will be in public hands, adding to the 9 percent of the company handed to Paulson & Co in a debt-for-equity deal earlier this year. Private equity backers TPG and Apollo will retain a controlling 81 percent stake. Money raised by the IPO is intended to go towards funding growth projects including upgrades to Caesars Las Vegas and the development of two new casinos in Ohio. Harrah’s CEO Gary Loveman did not comment on the re-branding in a third-quarter results statement also released on Friday. Still, the company’s float prospectus said: “Our Caesars brand remains the most recognized casino brand in the world, and we plan to leverage the power of this brand as we expand into international markets.” The public offering appears well timed to coincide with an upswing in US casino fortunes, including an improvement in Vegas numbers. However, profits again remained elusive for Harrah’s in the third quarter, according to the results statement released Friday. Despite the cash-flow gain through the acquisition of Planet Hollywood on the Vegas Strip, the company saw adjusted EBITDA fall 9.2 percent year-on-year to US$489.8 million in the third quarter. The decline came despite third quarter net revenues that were up by a fraction of a percent to US$2.289 billion. The period also saw the operator narrow losses to US$168.4 million compared to a loss of US$1.328billion in the third quarter last year. Harrah’s CEO Loveman said the company would remain focused on “potential growth opportunities”, even while it plans to find US$129 million in cost reductions in the coming quarter. “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,” Loveman said. * Gaming Compliance / Macau Business
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