Caesars IPO: what you need to know

Not everyone is excited about the Caesars Entertainment IPO. According to BusinessWeek, some analysts are saying it ‘doesn't offer enough of a discount to offset the threat of further stock sales by private equity owners.' The travel and entertainment company is sitting on $22 bn in debt, which the $18.1 mn capital raise, obviously, won't address.

Here's what you need to know:

1. The discount: it ‘may lure some investors', according to BusinessWeek, but ‘the potential sale by the Las Vegas-based company's owners of more than $300 mn in shares may subsequently weigh on the stock price.' The pricing was postponed until today.

2. Getting to the market: the small IPO gives Caesars a chance to go public. There will be a dilutive effect, however, which investors should spend some time understanding.

3. The exit: the Caesars IPO gives Paulson & Co the opportunity to exit, which may entail the sale of 34.7 mn shares following the IPO. GS)" href="http://www.insideipo.com/tag/goldman-sachs">Goldman Sachs and DB)" href="http://www.insideipo.com/tag/deutsche-bank">Deutsche Bank have the right, together, to sell 22.3 mn shares at the top end of the IPO range. Paulson & Co has the right to sell 12.4 mn shares. Apollo Group and TPG aren't selling any of their shares and ‘aren't among the funds that have registered for additional sales.'

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Source: BusinessWeek

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