(Reuters) – Shares of Caesars Entertainment rose 12.8 percent after the casino operator said in a regulatory filing that it will offer $1.2 billion in stock in a new company that will aggressively seek online gaming opportunities.
Caesars, whose properties include the landmark Caesars and Flamingo casinos on the Las Vegas Strip, said it would create a new venture that investors will own along with the company.
Shareholders of Ceasars Entertainment would get a non-transferrable right to buy shares in Caesars Acquisition Co at $9.43 each. Caesars Acquisition would hold the shareholders’ interest in the new venture, Ceasars Growth Partners.
The venture would focus on building or buying assets that leverage “interactive technology with well-known online brands.”
Caesars last year generated $207.7 million in revenue from its interactive unit, which includes social and mobile games, the World Series of Poker, and regulated online games played for money. In 2011, that unit produced revenue of $66.5 million, according to the filing, made with the U.S. Securities and Exchange Commission.
The company operates online games in Britain, France and Italy that feature actual monetary wagering. It plans to launch an operation this year in Nevada, which in 2011 approved online poker within state boundaries, the company said.
It added that it is “actively participating in the U.S. lobbying effort for other states to follow Nevada, Delaware and New Jersey’s lead, and is supportive of a federal framework as well.” The latter two states have also passed online gaming laws.
A second unit of the new venture would hold Caesars Entertainment’s existing interests in Planet Hollywood Resort and Casino in Las Vegas, a Baltimore casino under development and 50 percent of management fees for the properties.
Apollo Global Management and TPG Global, which together own approximately 70 percent of Caesars Entertainment, will own at least 42 percent of the new venture’s shares, the filing said, and plan to exercise subscription rights of at least $500 million.
Ceasars Entertainment is offering slightly more than 125 million shares in the new company.
(Reporting By Ronald Grover; Editing by Steve Orlofsky)
