Saturday, 27 December 2014
Last updated 2 days ago
Jun 4 2010 | 9:19am ET
Paulson & Co. is betting big on the gaming industry, agreeing to take a 9.9% stake in Las Vegas-based Harrah's Entertainment Inc.
Under terms of the deal disclosed by Harrah's on Thursday, the hedge fund firm will trade $351 million in cash for $532 million in debt owned by a subsidiary of Harrah's.
As part of the deal Paulson will exchange the $532 million in debt and an additional $178 million of Harrah's debt held by Paulson for a 9.9% equity stake. Harrah's current owners, Apollo and TPG Capital, will exchange $408 million of debt for equity under similar terms, providing much a much needed debt reduction for the highly levered casino company.
Harrah's Entertainment—world's largest provider of branded casino entertainment—became saddled with debt during the go-go years of easy borrowing for leveraged buyouts when Apollo and TPG Capital took the company private for $30.7 billion in early 2008.
"We are raising capital for emerging domestic and international growth opportunities, and upon closing of the exchange, will reduce our debt and lower our interest expense," said Gary Loveman, chairman of the board, chief executive officer and president of Harrah's. "The investment from Paulson, an independent third party and a large, sophisticated investor, reflects the strong and resilient performance of our company, particularly as we emerge from a difficult economic climate, and the encouraging prospects for our future. We also are gratified by the confidence in Harrah's demonstrated by our sponsors, Apollo and TPG."
Dec 1 2014 | 10:21am ET
As 2014 winds down, Northern Trust Hedge Fund Services executives took some time to share their outlook on trends facing the industry in 2015. Read more…
Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.