Hara Entertainment, which participated in the biggest private equity acquisition on record about three years ago, filed paperwork Monday to return it to the public market to raise more than $500 million to pay for several development projects, including the completion of Caesars Palace’s hotel tower.
Harras said in a filing with the U.S. Securities and Exchange Commission that he would sell a number of unspecified shares “to fund the short-term pipeline of growth projects and general corporate purposes.”
It was unclear how many shares of Hara’s stock would be sold and listed on which market, but the company said it would sell the shares “as soon as possible after this registration statement takes effect.”
Company officials said they could not comment on the filing because of SEC regulations. One observer thought an initial public offering could raise between $500 million and $1 billion for Harah’s initial public offering.
The company went public on the New York Stock Exchange in January 2008, when private equity groups TPG and Apollo Management took the company private with a $29 billion buyout that more than doubled the casino operator’s debt burden. The companies bought investors for $90 per share.
Over the past year, Harra’s has taken steps to lower its debt burden and interest costs. Harah’s said in a filing that Apollo and TPG, the company’s largest shareholders, would retain a controlling stake in the company. However, Harah’s did not provide a percentage of the company’s ownership. Barbara Cappaert, a game analyst at KDP Investment Advisors, said in a research note on Monday that it was unclear if Hara’s IPO could succeed.
“We weren’t fans of the company because of its high leverage and opportunistic exchanges that weren’t necessarily beneficial to creditors,” Carpart said. “But we’re willing to acknowledge that in the right time, more likely 12 months, Hara might be able to pull it off. This doesn’t just mean the company might find enough windows to sell off and establish a dealable stock.”
Harrah’s move comes less than a week after rival MGM Resorts International announced plans to raise more than $517 million through a 40.9 million share offering. Harra’s IPO funds will be used for three projects, including two in Las Vegas. The Las Vegas-based company said some of the money will be used to build LINQ, a retail, dining and entertainment area between the Imperial Palace and Flamingo that was first planned in 2006.
In addition, Harrah’s wants to complete the Octavius Tower in Caesars Palace, which has 660 hotel rooms. The tower’s exterior was completed last year, but its interior has been delayed due to the economy sliding and sluggish tourism. Mr. Harra said the completion of Caesars Tower would cost $85 million.
Harrah’s is also involved in an Ohio casino joint venture with Dan Gilbert, founder and president of Quicken Roans and owner of the NBA’s Cleveland Cavaliers. Harrah’s will be a minority investor in the project with Gilbert’s Rock Gaming and will operate downtown casinos in Cleveland and Cincinnati.
Hara’s initial public offering will be accompanied by a $710 million share sale plan registered by the company in August on behalf of hedge fund billionaire John Paulson, which has contracted to acquire nearly 10% of the gambling company. 파워볼실시간
“We have never applied for a listing of common shares on any stock exchange, nor do we need to do so,” the August prospectus said. While Paulson may exercise the right to require registration of an underwritten public offering, “we cannot guarantee that our efforts to achieve such a listing will be successful,” the filing states. Earlier this month, Nevada gaming regulators tentatively approved the company’s plans to eventually sell its shares.
