Caesars (CZR) IPO at $9 – Company Returns to the Public Markets

February 8, 2012

Caesars PalaceCaesars will launch their IPO under the ticker CZR. The company is offering 1,811,313 shares to the public priced at $9. Credit Suisse and Citigroup are the joint-book runners. Caesars operates under the Caesars, Harrah’s, and Horseshoe brand names. Caesars also owns the World Series of Poker and London Clubs. When the stock commences trading at $9 the market cap will be $1.1 billion and the enterprise value will be $22 billion as the company will still have a heavy debt load. Caesars valuation is down sharply from peak valuations in 2007. John Paulson has been one of the private investors.

Caesars comes public in a period of low interest costs where Vegas is starting to slowly recover. There is an old adage among Las Vegas gamblers: “don’t game where they don’t own the house”. It will be interesting to see if Caesars will maintain their levels of customer service in a period where expenses will be more scrutinized in the light of the public markets.

Casino Market Capitalizations:

Las Vegas Sands:              $42B
Wynn Resorts:                 $14B
MGM Resorts:                 $7B
Caesars:                         $1.1B

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