Industry watchers predicted last year that Caesars was going to start selling noncore assets, including its international properties, in an effort to pay down its large debt load and to keep up with tough competition. Caesars spokesman Gary Thompson said Monday that the company does not have any specific assets on the block but gets inquiries from potential buyers about certain assets all the time and gives "due consideration to those that appear serious."
One hedge fund investor who holds Caesar's debt told The Deal Pipeline last month that the company appeared headed toward a Chapter 11 filing. Other industry sources agree that at some point Caesars will have to go through a restructuring process to lower its debt load.
Earlier this year, Caesars announced plans to form a new entity,
Caesars Growth Partners. However that new holding company is intended as a growth vehicle to fund new projects, such as online gaming, instead of paying down debt. The new operating company will be financed with a $1.2 billion capital infusion from existing shareholders, including $500 million from
TPG Capital and
Apollo Global Management
Caesars got acquired by TPG and Apollo in January 2008 for $30.7 billion, including $12.4 billion in debt. The two private equity firms still own a 69.9% stake in the company.
Caesars shares were trading higher Monday, gaining 2.82% to $18.88.-- Written by Demitri Diakantonis and Lisa Allen in New York