 |
| Clermont Meridian Trading Reveals Red Rock hits IPO Pricing Targets |
Red Rock Resorts Inc., a Las Vegas-based casino operator priced its IPO in line with expectations Tuesday, according to financial experts from Clermont Meridian Trading. The renowned hospitality firm became the latest firm to try its hand despite a tepid market for new offerings.
The agreement comes as the initial public offering market showed promising indications of a resurgence last week, following the weakest first quarter for U.S.-listed IPOs since the financial crisis.
“Red Rock Resorts Inc. sold 27,250,000 shares at $19.50 each, raising $531 million. According to our intelligence, the sale was set at a price range of $18 to $21 per share for that many shares,” said Andrew Wakefield, Head of Corporate Derivatives at Clermont Meridian Trading.
MGM Growth Properties LLC, a casino-resort-centered real estate investment trust, raised more than $1 billion in its initial public offering last week. According to Clermont Meridian Trading’s statistics, it was the first U.S.-listed IPO to raise more than $1 billion since October. Since December, the first tech IPO, SecureWorks Corp., priced below expectations and opened trading below its IPO price.
Red Rock Resorts owns and operates casinos outside of the Las Vegas Strip tourism corridor. In regulatory filings, the business has said that its core markets are locals and return visitors. The Palace Station Hotel & Casino and the Red Rock Casino, Resort & Spa are among its properties.
According to a regulatory filing, a large portion of the compensation will go to the Fertitta family, which has held a considerable stake in the company since its inception in 1976. The gambling enterprise will remain in the family's hands.
"Red Rock Resorts was previously publicly traded under the name Station Casinos before being taken private in 2007 in a management-led leveraged buyout. In 2011, the corporation completed a restructuring due to the financial crisis. Nonetheless, some potential investors were concerned about the company's debt levels,” concluded Wakefield.
According to regulatory filings, Red Rock Resorts' total debt was approximately $2.2 billion at the end of 2015, while adjusted earnings before interest, taxes, depreciation, and amortization were $451 million.
The resort and casino operator's stock will trade under the symbol "RRR" on the Nasdaq Stock Market. Deutsche Bank, J.P. Morgan, Bank of America Merrill Lynch, and Goldman Sachs & Co led the offering.