Harrah’s IPO Pricing Delayed Over Concerns Shares Are Priced Too High

Harrah’s Entertainment Inc.’s planned IPO has been delayed as a result of concerns that the shares have been priced too high, Reuters reported citing sources familiar with the matter. News of the delay was first reported by CNBC. The pricing was initially scheduled on Thursday, buy could be pushed backed to Monday. Harrah’s is seeking to raise about $500 million and plans to sell 31.25 million shares for $15 to $17 a share. The company is backed by Apollo Management and TPG.

(Reuters) – A planned stock listing by Harrah’s Entertainment Inc, the world’s largest casino operator by revenue, has been delayed over concerns it would have been priced too high, sources familiar with the matter said.

One source said the offering could be delayed until Monday as underwriters try to gauge the right price for the sale, while another said there would be further clarity on the timing on Friday.

The highly leveraged casino company, which is majority-owned by private equity investors, has said it would sell off a stake of about 9.3 percent at a price of between $15 and $17 per share.

The offering of 31.25 million shares, first reported to be delayed by CNBC, was initially scheduled to price on Thursday.

Harrah’s spokesman Gary Thompson said he had no information on the timing of the share sale, which is expected to raise more than $500 million.

Private equity firms Apollo Management LP [APOLO.UL] and TPG Capital [TPG.UL] bought Las Vegas-based Harrah’s in a $31 billion leveraged buyout in early 2008, just as the global financial crisis was settling in.

The company, which is changing its name to Caesars Entertainment Corp, has since seen its financial position erode as spending by consumers and businesses slumped. Harrah’s posted a net loss of $165 million in the third quarter of this year.

Surging stock indexes have triggered a renewed interest in the IPO market by private equity companies seeking to sell stakes in their portfolio companies, but such sales have lagged overall initial public offering performance in the United States, according to Thomson Reuters data.

Paulson & Co, a hedge fund manager that injected cash into Harrah’s in June in exchange for equity, is also planning to sell its 30.24 million-share stake.

The company operates about 50 casinos, primarily in the United States and Britain, mostly under the Caesars, Harrah’s and Horseshoe brands. It also owns and operates the World Series of Poker tournament and brand.

But Harrah’s does not have a casino in Macau — the Chinese enclave that several years ago overtook Las Vegas as the world’s largest generator of gambling revenue.

Chief Executive Gary Loveman has said the company remains interested in a presence in Asia. It also is lobbying for legalization of online poker in the United States.

The company said previously it plans to use proceeds from the offering to fund retail, dining and entertainment developments between the Imperial Palace and the Flamingo in Las Vegas, among other projects.

(Reporting by Deena Beasley. Editing by Robert MacMillan, Carol Bishopric, Gary Hill)