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Harrah's Pulls IPO Due To "Market Conditions"
Once again we are left scratching our heads how a market trading near its year highs can constitute a "market condition" out for an IPO, but that's precisely what happened to mega LBO Harrah's which as of this morning is no longer going private. Of course, the only market condition involved is not having Getco as your DMM, which is willing to bid up all shares below a certain threshold, only to subsequently go ahead and cell to Citadel in dark pools. Where those shares go afterwards, only Brian Sack knows. The biggest loser however in today's fiasco is John Paulson who is now stuck with holding $710 million of equity in a company that may or may not be viable post the tens of dividend recap deals that are sure to follow the failed IPO.
From Bloomberg:
Harrah’s Entertainment Inc., the world’s biggest casino company, said that it terminated its $531 million initial public offering due to market conditions.
The casino company taken private by Apollo Global Management LLC and TPG Capital was scheduled to sell 31.3 million shares for $15 to $17 yesterday, according to a filing with the Securities and Exchange Commission and data compiled by Bloomberg. Las Vegas-based Harrah’s planned to change its name to Caesars Entertainment Corp. before the initial offering.
The IPO was the last of four scheduled for companies backed by buyout firms in the biggest week for U.S. initial sales since March 2008. Almost 40 percent of IPOs led by private equity funds have left buyers with losses this year, data compiled by Bloomberg show.
Harrah’s “today announced that it is not pursuing its initial public offering of common stock at this time due to market conditions,” the company said in a statement.
The stock scheduled to be sold by Harrah’s in the IPO was in addition to $710.3 million of shares registered for sale by John Paulson’s Paulson & Co. hedge fund. He agreed in June to acquire almost 10 percent of Harrah’s by swapping bonds bought at a discount.
Leon Black’s New York-based Apollo and David Bonderman’s TPG took Harrah’s private for $30.7 billion, including debt and transaction costs, in January 2008.
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ALERT :::Tyler , i think you will be SHUT down
http://www.arnnet.com.au/article/368621/us_senate_panel_approves_website...
Dead Drops: When US Cyber Command Pulls the Nethttp://www.youtube.com/watch?v=A3pKF6gREFw&feature=
When SHTF gubment will redirect to Homeland Security, the only site available. "Sorry but all records of your digital wealth have been temprarily lost. We're working on it, trust us. If in the meantime you require financial support please apply for food stamps."
Might be a good idea to get some physical dollars before Dec 7 just in case.
No, no, no. The Internet keeps the masses distracted. If people spend hours each day staring at their tiny screens on their cellphones, they don't have time to think about what is going on around them. You want to energize the masses, cut off their entertainment. The Internet is the last thing TPTB will cut off.
Coffins for ZHers.
That reminds me of the Jesse Ventura episode on camps which aired last week...watching that legislator squirm at the end under questioning shows how the system is out of control.
Quick call Brian Sack! It's time to POMO this market into submission, can't have cancelled IPO's and GM stock falling.
on top of that another PBoC hike of 50 bps.....
exactly as Tyler predicted yest..
Now that Getco pumped it, they'll dump it and nobody really cares anymore.
And GM continues it's drop in the premarket.
Why?
Even after losses, secondary offerings, depressed real estate deals shit like lvs, MGM, and wynn have been like on viagra.
D'you think that has anything to do with WYNN's $8 div?
And didn't they just punch through the wrong side of their 50-day EMA?
If you experience sudden vision or hearing loss, consult your doctor.
The problem: GM hired HFT firm Getco to introduce the largest IPO in history. Not Goldman.
Friggin sign of the times
The faster Harrah's and their ilk get hung out to dry the better. I understand (through comments) that quite a few folks here are pro-vegas, but the whole thing just feeds your money to all the wrong hands.
Each casino is money-laundering central.
In fact, while it might have a terrible impact on those poor half-naked cocktail waitresses, boycotting gambling might keep money in people's hands.
Banning it in some places, allowing it in others (like prostitution) just created totally bogus arbitrage opportunities for the mafia.
I hope Harrah has had their last hurrah.
ORI
http://aadivaahan.wordpress.com
I don't suppose people have the option of not going in the casino?
Wouldn't legalizing it everywhere eliminate the arb as well?
Snowball, of course they do. But it is a bit like internet porn, right?
Some people climb a mountain because it's there, others for the challenge, some because it's in the way..... kind of like that.
In addition, Atlantic City on the east, Vegas on the west, Some tucket or the other in CT, became the go to Convention Central places. So easy to go for a company meet, lose some money, get a hooker and since what you did in Vegas stayed in Vegas, you were left a liar, possibly with a major itch somewhere, for the rest of your life.
And of course the arb would disappear, which would be great because it is not legislated in someone's (read mafia's) favour. Which is good. In life there are genuine arbs and then this manufactured, legislated, man-dated (that sounds gay) arbs. They need to go.
ORI
http://aadivaahan.wordpress.com
Agreed, mostly, but prohibition of monetary self-flagellation is just another mandated arb in favor of the black market, in my opinion.
If I understood what you were conveying with that, I think I, mostly, agree.
If you think I misunderstood, please feel free to clarify!
;-)
Edit: I got it! Really. Phew, that was some sentence structuring Snow.
ORI
In the fake economy of the 2000s (pre-crash), gambling was one of the prime 'growth industries' (even though it drains funds from 99.9% of customers). Casinos were popping up everywhere and were supposedly a testament to our glorious way of life. But decadence rarely is anything but a testament to decay.
One dirty little secret of the gambling industry: it's government subsidized. A large pool of customers are elderly gambling with their social security checks from Uncle Sam.
" But decadence rarely is anything but a testament to decay. "
+++ Classic Cavair E. Well said. Vegas had (last I was there, yeaaaaars ago), a ROme in decline feeling to it.
And yes, lot's of little old people's money went right into the black (market) hole via Casinos. Wicked system.
ORI
http://aadivaahan.wordpress.com
I work as a paramedic, we go to nursing homes several times a day. The casinos in the St. Louis area send bus shuttles to all the nursing homes in our district to pick up the GOMERS...
Free market capitalism at it's finest.
Disgusting. Like ambulance chasers.
ORI
Gambling is simply a tax on stupidity.
A monetization of OCD.
Old Codger's Debt?
ORI
Are you kidding me...a casino stock not doing well in a casino trading environment?
They aren't used to the competition.
Who is Brian SacK?
What is DMM?
What is Getco?
Who is Citadel?
What is a dark pool?
Is there a Zero Hedge glossary?
Is this Jeopardy?
I'll take "Searches" for $100, Alex.
What is "Google".
That drew a smile. :)
Look up at the top...there is a glossary link...anything you cannot find there you will need to do your own research.
LOL Harrahs bust - all those union dollars to elect harry the reid down the toilet
Short GM yet?
Hellofanengineer - Yeserday early AM you suggested waiting until next Wednesday.
Second thoughts?
Thanks in advance.
3day wait period before retail can short an IPO.
According to everyone at ZH i suppose a short is in order. Id watch out for that however. Too many deep pockets need it to survive and fly, at least for the time being while the market's aren't crashing.
Folks, this is very simple.
Harrahs has nothing in Macau. No license, no JV, nothing.
The only game in gambling now is China.
Vega is in a shit dive and everyone knows it.
Is the Ben Bernank going to monetize casinos' debts?
I love Vegas for the nightlife, but Macau for the gambling. Disappointing Harrah's has nothing in Macau since Caesar's is one of my favorite Vegas casinos. Seems like everyone else in Vegas is also in Macau though - Sands, Wynn, MGM, Venetian.
I love Vegas for the nightlife, but Macau for the gambling. Disappointing Harrah's has nothing in Macau since Caesar's is one of my favorite Vegas casinos. Seems like everyone else in Vegas is also in Macau though - Sands, Wynn, MGM, Venetian.
It doesnt matter really. Tyler has twitter, doesn't he?
WB7 *Hit nail on head. No Maccau, no IPO. Vegas is in a steep nose-dive, engines flamed out. To incease income, Harrah's was the first to have an eight-deck shoe, 6-5 payout on blackjack, hit soft 17, deep deck penetration (bad for players), remove double-down after splits, can't re-split Aces, in other words, removing any advantage that a player has to win. Couple that with less comps, poor service, etc., was the volatile cocktail that has customers leaving in droves. Plus, slots are frozen. Casinos like theirs only exist now to beat the consumer over the head. They forgot who their primary customers were; people that lost but had a good time doing it.
They also didn't understand the relationship building between a customer and his/her casino host. They took away most of the host's ability to interact with their customers. MGM hs been vectored into their flight path, and will soon become an undesirable place to gamble, except in Maccau, of course, where the Asians at my table played on 100k markers (at a time) and bet multiple spots with table maximum 10k. They are the ones that make Maccau insanely profitable, and now they hate Vegas.
Your right, John Paulson was ready to dump his 710 million dollars of shares and now it has to wait. This guy must be ticked off big time.