Back in 2007, Caesars Entertainment went private in a $27.8 billion transaction. It was one of the last deals before the financial crisis wrecked the private equity boom.
Since then, Caesars has been trying to deal with its huge debt load.� To this end, the company has attempted to return to the public markets, filing last year for an offering to raise more than $500 million, but there was not enough interest.
Caesars is now making another try, filing yet again this week for an IPO. This time, however, the expectations are much more sedate, with a total amount of $50 million (but this can easily be boosted as the IPO gets closer).
Caesars owns 52 casinos across 12 states and seven countries.� In aggregate, the company runs�3 million square feet of gaming space, with 42,000 hotel rooms.� Some of the brands include Harrah�s, Rio, Paris, Bally�s, Flamingo and even Planet Hollywood.
Over the years, Caesars has innovated its Total Rewards system, launched in 1997, which has been key in boosting revenue (with promotions, for example).� The program has more than 40 million members.
Caesars also has invested in online gaming.� In fact, it has even has social games on Facebook.� No doubt, there should be other online opportunities to leverage Caesar�s �World Series of Poker� franchise, especially if online gaming is legalized in the U.S.
Despite all this, Caesars will likely face some skepticism from investors.� The company has a whopping $22.5 billion in debt and annual debt service of nearly $1.7 billion.
Unfortunately, its operating results have been lackluster.� During the first nine months of 2011, revenue came to $6.7 billion, which was flat compared to last year. Even worse, the company lost $467 million. The sluggish economy has certainly taken a toll.
But perhaps the biggest drawback is that Caesars doesn�t have a Macau casino, unlike Wynn Resorts (Nasdaq:WYNN) and Las Vegas Sands (NYSE:LVS).� This is really where the growth is, and it�s going to be extremely tough for the company to make any headway there.
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