Red Rock Resorts IPO Seeks to Raise Half a Billion Dollars
April 26 2016 - 1:40PM
Dow Jones News
Red Rock Resorts Inc. is betting the time is right for a
stock-market debut.
The Las Vegas-based casino operator is set to price its initial
public offering, which is aiming to raise around half a billion
dollars, later Tuesday, according to people familiar with the
deal.
The offering comes a week after casino-resort focused
real-estate investment trust MGM Growth Properties LLC priced at
the high end of its target range and raised more than $1 billion in
its initial public offering. It was the first U.S.-listed IPO to
raise more than $1 billion since October, according to
Dealogic.
Red Rock Resorts' offering comes amid a weak stretch for the IPO
market—the first quarter was the slowest for U.S.-listed IPOs since
the financial crisis. There were tentative signs of improvement
last week as three companies made their U.S. stock-market debuts,
including the first tech IPO since December. MGM Growth Properties
priced at the high end of expectations and rose in its first day of
trading, while SecureWorks Corp., the tech IPO, priced below
expectations and opened trading below its IPO price.
Red Rock Resorts and selling shareholders plan to offer about
27.3 million shares in the IPO, raising about $531 million at the
midpoint of the expected $18 to $21 per share range, according to
regulatory filings.
Red Rock Resorts operates Las Vegas casinos that aren't on the
Las Vegas strip tourism corridor, and the company says in
regulatory filings that it depends on locals and repeat visitors as
its key markets.
Much of the payout will go to the Fertitta family, which has
maintained a significant ownership in the company since it was
founded in 1976, according to a regulatory filing. The family will
retain control of the gambling company.
Red Rock Resorts was previously publicly traded under the name
Station Casinos before it was taken private in 2007 in a
management-led leveraged buyout, according to a regulatory filing.
Following the financial crisis, the company finished a
restructuring in 2011.
Still, its debt levels are a concern for some potential
investors, some analysts said.
Total debt for Red Rock Resorts at the end of 2015 was nearly
$2.2 billion, while adjusted earnings before interest, taxes
depreciation and amortization as of Dec. 31 was $451 million,
according to regulatory filings.
A spokeswoman for the company declined to comment on the
offering.
The resort and casino operator will list its shares on the
Nasdaq Stock Market under the symbol "RRR." Deutsche Bank, J.P.
Morgan, Bank of America Merrill Lynch and Goldman Sachs & Co.
are leading the offering.
Write to Corrie Driebusch at corrie.driebusch@wsj.com
(END) Dow Jones Newswires
April 26, 2016 13:25 ET (17:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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