Caesars IPO: It’s baaaaaack! Adelson: I’ll take Taiwan

In a pathetically underwhelming announcement, Caesars Entertainment is planning to float an IPO of 1.8 million shares, priced to move at a modest $8-$10 per share. Which means, best-case scenario, that CEO Gary Loveman will raise $18 million, tops, from the offering … a drop in the bucket of his development aspirations, which include $550 million Linq, two in-progress casinos in Ohio, a possible third one in Baltimore and a racino at Suffolk Downs near Boston. Besides, Loveman tried this in the fall of 2010 — at much higher offering prices — and bombed.* Since then, Caesars’ enterprise value has fallen from $26 billion to $19.6 billion (and 36% down from the company’s LBO price) and it still carries a debt burden so onerous that, at the time of the previous IPO attempt, Barrons counseled that bankruptcy would be a preferable course.

The purpose of the latest caper isn’t to raise capital but generate “liquidity for some of the existing stockholders,” according to analyst Chris Snow. Phrased like that, it sounds as though Loveman, Texas Pacific Group and Apollo Management are going to use IPO proceeds to pay themselves a dividend. In any event, if all goes according to plan, Caesars will flood the market with anywhere from 22 to 70 million additional shares (essentially a reboot of the 2010 offering). Other interesting factoids from the IPO announcement were that Caesars lost $467 million in 1Q-3Q11 and that, despite diversification of revenue streams in Las Vegas, Caesars still counts on gaming for 75%+ of its revenue nationwide. As of this very moment, $9.72 gets you a share of Boyd Gaming, a company whose financial house is in far better order. I wouldn’t invest so much as a wooden nickel with the erratic Loveman, but perhaps Wall Street will give him a vote of confidence this time.

* — Memorably, Loveman tried to distract attention from the 2010 IPO failure by going on an incomprehensible rant at Global Gaming Expo, waving his arms a lot and hollering at convention attendees.

Will it play in Peking? Unlike Caesars, Las Vegas Sands is making money hand over fist. Flush with $320 million in corporate profits, CEO Sheldon Adelson is talking up potential new Asian territories, especially Taiwan. This isn’t the first time he’s played the Taiwan card. You always have to wonder if Adelson is serious, is hoping to wrest further concessions (i.e., Cotai Sites 7 & 8) from the government of Macao or is in such bad odor with Chinese authorities that he doesn’t care what they think.

Whump! That’s the sound of 340 pages of casino regulations hitting the desks of Rock Gaming Ventures and Penn National Gaming. Drafted by Ohio’s Casino Control Commission, they calibrate gaming chips and specify “who fixes slot machines.” (By which I’m sure the Columbus Republic means who repairs them, not who fiddles with the hold percentage.) Vague or ambiguous rules can only lead to trouble down the line, so Ohio is erring on the side of probity … although potentially barring job applicants who have had personal bankruptcies in the last decade may be carrying prudence a bit far. Penn (whose Toledo project is shown at left) gave the rules a thumbs-up, especially since the process had reset to Square One when Gov. John Kasich (R) petulantly sacked all of predecessor Ted Strickland‘s regulatory appointees. Now Penn and Rock Gaming/Caesars have to hope that their casino openings aren’t stalled while the Ohio Lege ponders the Control Commission’s magnum opus.