NEW YORK (AP) - The New York hedge fund run by billionaire John Paulson is looking to sell its entire stake in Harrah's Entertainment Inc., America's biggest casino company.
The stock sale had been expected, as the plans were announced in August. The stock sale comes three days after Harrah's canceled a
In a filing with the Securities and Exchange Commission on Monday, Harrah's indicated that Paulson & Co. Inc. may sell up to 7.1 million shares, which is its entire 9.9 percent stake in the Las Vegas-based company.
Harrah's said in the filing that it will not receive any proceeds from the stock sale.
Paulson & Co. Inc. got its stake in Harrah's in exchange for taking on $710.3 million in debt. Paulson bought most of that debt, $532 million, for $354.9 million — nearly two-thirds its face value.
Harrah's two biggest shareholders are Apollo Management Group and Texas Pacific Group.
Apollo Management Group, a global alternative asset manager led by buyout titan Leon Black, and Texas Pacific Group, a private investment firm, purchased Harrah's in 2007 for $17.1 billion and took on $12.4 billion in debt. The buyout took Harrah's private in one of the biggest leveraged buyouts ever.
Harrah's, whose properties include the Flamingo, Caesars Palace and Bally's, saw its revenue fall from a peak of $10.8 billion in 2007 to $8.9 billion last year — an 18 percent decline. Total gambling revenue for U.S. commercial casinos dropped 10 percent over that period, as people chose to save their money instead.
The canceled IPO, which Harrah's had said would raise as much as $531 million, would have helped ease the company's heavy debt load.
Harrah's, which plans to change its name to Caesars Entertainment Corp., owns or manages more than 50 casinos in 12 states and six countries.
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