Facebook
Fark
Digg
Reddit
StumbleHarrah’s cancels plans for IPO
Friday, Nov. 19, 2010 | 6:24 a.m.
Sun Coverage
Harrah's Entertainment Inc. canceled its initial public offering Friday, folding its hand for now on a risky bet on returning to the stock market just three years after it went private.
The casino operator was expected to price the offering on Thursday and begin trading on the Nasdaq this week. Harrah's had said it would raise as much as $531 million for casino projects and to help with its heavy debt burden.
A Harrah's spokeswoman said the company is not commenting beyond a brief statement announcing the cancellation and citing market conditions.
But the company had planned its IPO in what has been a rough time for the casino business, as people cut back on gambling in the tough economy and opted to save their money instead. Harrah's reported a loss of $634.4 million during the nine months that ended Sept. 30, though recently its business, along with the broader casino industry, has shown signs of improvement.
The IPO would have helped ease the company's heavy debt burden. Harrah's has nearly $20 billion in debt, and Francis Gaskins, president of IPOdesktop, estimates the company is spending as much as 22 percent of its revenue on interest payments. This would put interest payments at about $1.47 billion for the first nine months of the year.
Much of the company's debt was piled on by the two private equity companies, Apollo Management Group and Texas Pacific Group, who took Harrah's private three years ago. Apollo and TPG planned to keep majority control of it after the IPO. They paid $30.7 billion in 2007 in what was one of the biggest leveraged buyouts ever. But that was before the financial crisis hit.
The company's revenue, which peaked the year of the buyout at $10.8 billion, tumbled 6 percent to $10.1 billion in 2008. Recently, Harrah's business has started to stabilize, and the company had planned to use the IPO to expand.
Harrah's, which has planned to change its name to Caesars Entertainment Corp., owns or manages more than 50 casinos in 12 states and seven countries.
In a recent note to investors, Jefferies analyst David Katz said that with industry sentiment at a "historical low," new property openings and the improving economy should accelerate earnings growth for casinos and gaming companies.
Harrah's shelved its offering a day after General Motors returned to Wall Street with its IPO.
Discussion: 3 comments so far…
Comments are moderated by Las Vegas Sun editors. Our goal is not to limit the discussion, but rather to elevate it. Comments should be relevant and contain no abusive language. Comments that are off-topic, vulgar, profane or include personal attacks will be removed. Full comments policy. Additionally, we now display comments from trusted commenters by default. Those wishing to become a trusted commenter need to verify their identity or sign in with Facebook Connect to tie their Facebook account to their Las Vegas Sun account. For more on this change, read our story about how it works and why we did it.
Only trusted comments are displayed on this page. Untrusted comments have expired from this story.
Post a comment
Most Popular
- Viewed
- Discussed
- E-mailed
- Photos: Olivia Culpo, 20, of Rhode Island is crowned 2012 Miss USA at Planet Hollywood
- US Navy hopes stealth ship answers a rising China
- Learning about Electric Daisy Carnival fans will help Las Vegas court them
- On the horizon: A quick look at projects poised to shape downtown
- Clark PG Kentrell Washington heading to Hofstra basketball
Everything Under the Sun
Blogs
The Kats Report
Joe Pesci remembers his own honeymoon in Vegas -- meeting the Rat Pack
Las Vegas Philharmonic says search for new music director to begin 'immediately' (1 Comment)
With Shenandoah project stalled, Wayne Newton hits back legally (7 Comments)
Where does a Playmate play when she turns 21? Vegas! (3 Comments)
Ice Ice Billy
The road to six-toed cats and Mayor Bubba
The Kats Report
David Itkin tells L.V. Philharmonic officials he's on his way out (14 Comments)
Diamond Dave sells it well as Van Halen pours out the power at MGM Grand (2 Comments)
- Locally owned and independent since 1950; Winner of the Pulitzer Prize for Public Service, best news website in the nation & DuPont Award for broadcast journalism
You have to wonder if bankruptcy is in the works. It would be great if those hedge funds took a haircut. Then Harrah's could IPO all they want.
Stations is the poster child for Harrah's, especially since they cut their video poker odds to 7:5, the lowest payout I have ever seen. Monkey see, monkey do. Right, Gary Loveman?
The suckers who will give the money for a piece of the action are fading away. It would be like spending $5M for a handful of trailer homes and hoping to make a profit. Oh, yes, please let me own some of your debt....
It goes to show how out of touch Harrah's Ent. is, people are not saving their money, they are using everything they make to keep a roof over their head, and food on the table. Gambling is nothing more than a waste of money, and if Harrah's is relying on gaming, maybe they need to reevaluate their thinking. Harrah's cancelled their IPO idea because they knew there was no way they were going to generate the money they were looking for, and it would only had made matters worst. It too bad that Harrah's supported Harry Reid, because that definitely turn this voter off. Reid is till the same old Harry Reid, he is going to try and pass a tax break for the middle class today, knowing that America wants the Bush Tax Cuts extended entact. Reid knows what just passing a tax break for the middle class will mean more taxes in the end, because capital gains, dividend and inheritance taxes will all increase and many tax deductions will be eliminated.
They went all-in for Reid.
Not sure if it is going to help them any.
Harrahs is the worst- I would not take this stock if it was giving to me.. They are going down and then Vegas will get better!!! Lets hope this goes quick!!!
This is the company that killed the goose and stole the golden egg. Now back for more cash. Their plan to change from gambling to gaming has killed the entire gambling industry, sending it in a downward spiral. They should be run out of the country, they are the worst.
The IPO was just another way to line their pockets with the working mans money! Harrah's has got to go! They have ruined the "Icon of Gaming" CAESARS PALACE!!! Rome is burning and I hope the upper management burn in hell as well! The government has ruined the country as well by deregulating and letting these corporations outsouce our work, have monopolies in every industry. Time to dump the tea and become real Americans again.
Harrah's is doomed. Most smart people are boycotting that cesspool that supported Harry Reid. Like I've said before, Harrah's won't be around much longer.
Teaparty people don't spend money, 80% of them are sick people on Social Security. Medicare and VA.
It is interesting that "pro-business" teabags are cheering on the demise of a company. I heard hate talkers Jerry Doyle and Heidi Harris do the same on KDUMB radio, guess they don't want ads from firms that supported Harry Reid???
Harrah's deserves to fail for having intentionally exposed tens of thousands of their construction workers, hotel employees, and hotel Guests to ASBESTOS, a known carcinogenic. Gary Loveman knows that this is true along with the following (partial) list: Kirk England, Tom Jenkin, Jan Jones, Don Marrandino, Debi Fetzner, Mike Nasby, Tom Adams, Mike Whitehead, Leon Vermillion, George Kirkwood, Harold Long, John Bare, Shane Jacobs, Robert Bruna, Jim Taysen, Tommy Cookson, Jason Spisak, Joe Vespy, Keith Adams, Ernie Savannah, Art Lopez, Ron Waters, Eric Martin, Dave Nelson, Tom Finchem, Luke Nasby, Barry Barclift, Paul Sepe, Ken Roy, Steve Rich, James Kearney, Johnny Mac, Beth Cookson, Emil Demillo, Josh Costello, Brad Johnson, Ron Cozart, Les Strong, Michael Behling, Steve Coffield, Jimmie Garrett, Tom Ford, Sam Barto, Converse Consultants...and the list goes on. I would like to see Harrah's held accountable for their despicable willful acts first for leaving thousands of their hotel rooms unsafe for the public to stay in (public fire safety traps) and secondly for the massive asbestos exposure. But in all fairness if a real investigation ever takes place of Harrah's Entertainmet Inc., our corrupt DA David Roger should be investigated as well for having lied in open court for Harrah's in front of Judge Eric Goodman - I know because I was there and for intentionally suppressing information that his office had regarding Harrah's Illegal Remodels. I want it to be known that Senator Harry Reid refused to help, as did Governor Dumbo Jim Gibbons, along with AG Catherine Cortez Masto...I wonder if Harrah's contributed to their campaign funds?
ASBESTOS is not as spectacular a death as someone falling to their death on a LV construction site, but rest assured it can cause death years later just the same. Considering the fact that Harrah's broke both State & Federal Laws regarding the ASBESTOS that they spread so freely in a number of their properties, I feel it is only fair that they be held accountable for their intentional criminal acts and be prosecuted to the FULL EXTENT OF THE LAW! Remember they also poisoned the environment by disposing all of the ASBESTOS illegally as well. Yes, Harrah's is an outstanding Company - representing all that is wrong with Corporate America today. This would be a great story for American Greed.