Last week saw a huge rise in the price of Caesar's Entertainment stock after the company announced that it would be selling up to $1.18 billion in new online gaming stock. The plan will see Caesar's Entertainment existing shareholders receive a right to buy on share in the new Caesar's Acquisition Company for each of the shares they hold, up to a total of 125.4 million shares, with shares in the company running at $9.43 each. The new company CAC, recently approved by the Nevada Gaming Board of Control will own Planet Hollywood in Las Vegas, part ownership of the Horseshoe Baltimore and Caesar's Interactive, meaning all online businesses of Caesar's. They will also own the World Series of Poker brand and name. There is no date as yet for the offering to be introduced.
It is all a little confusing now with the launch of the new company, but to make things easier, the bottom line is that Caesar's Entertainment will still own the majority of CAC, and the shares are being sold as a fund raiser, and many observers see this as a move to shield Caesar's assets from any debt.
Shares in Caesar's have almost doubled since the beginning of the year and the jump of 13% which took them to a peak of $16.36 almost meant that they reached their all time high. Caesar's majority share holders are Apollo Global Management and TPG Global, which combined own a total of 70% in Caesar's stock and they have informed that they intent to purchase around $500 million of the new CAC stock which means a 42% stake in the company. It gets even more complex when you take into consideration that Caesar's Entertainment and Caesar's Acquisition plan to get together in a joint venture which will be called Caesar's Growth Partners that will focus on land based assets. All told, the company now owns or at least manages over 50 casinos worldwide, and although most are in the states, they do operate in 6 other countries.