Caesars IPO not for private equity exit

You don't know who's going to benefit from the Caesar's IPO. According to the FT, the $18 mn capital raise will not be for the benefit of private equity backers Apollo Global and TPG Capital, the firms that bought the casino company in a 2008 $27 bn leveraged buyout. And, the capital isn't going to the company's $10 bn in debt.

Rather, it is ‘meant to provide a group of undisclosed co-investors in the original deal the opportunity to sell', reports the FT. The group is putting 1.8 mn shares (figted to Caesars) on the block, in a sale that's being led by CS)" href="http://www.insideipo.com/tag/credit-suisse">Credit Suisse and C)" href="http://www.insideipo.com/tag/citigroup">Citigroup. Right after the IPO, the investors will be able to unload half of the 22 mn shares they'll still own. The rest can go 180 days after that.

In the IPO itself, only 1 percent of the company's outstanding shares will be put up for sale, and the deal results in an implied valuation of around $1.25 bn. It's a pretty ugly scene. At the time of the buyout, Caesar's boasted an equity valuation of $17 bn, and in late 2010, it was valued at $5 bn for the purposes of an unsuccessful $500 mn capital raise.

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Source: FT

Photo: C.K.H. via Flickr