Less than three years after being private equity firms Apollo Global Management LLC and TPG Capital LP took the company private in a .7 billion deal, Harrah’s Entertainment has sought permission to sell an unspecified number of shares in a public offering designed to raise 5 million.
At least $500 million of the proceeds would be used to build two the company’s new casinos in Cleveland and Cincinnati, Ohio, in a joint venture with the NBA Cleveland Cavaliers owner Jeff Gilbert, along with some improvements at several of its Las Vegas properties.
The company issued an amended regulatory filing with the Securities and Exchange Commission. Experts say the filing is the first step in obtaining approvals from the SEC to make the offering. The percentage of ownership by Apollo and TPG Capital would be reduced from 89 percent to 83 percent as a result of the sale.
In addition to the Ohio developments, the SEC filing said Harrah’s would use some of the money to complete the 660-room Octavius Tower at Caesars Palace, on hold for over a year now, and build an entertainment and dining center between the Imperial Palace and the Flamingo, which will include a giant Ferris wheel.
In the request for the IPO, the company said it expected improvements in its operations.
“We operate businesses that have inherently low variable costs such that positive change in revenues should drive relatively large improvements in EBITDA,” Harrah’s Chairman and CEO Gary Loveman said.
A company spokesman cautions that the IPO offering is only a submission and there is no guarantee it will be completed. Harrah’s is expected to announce a name change to Caesars Entertainment in the near future.