Red Rock Resorts trading off to rocky start
Newly minted Red Rock Resorts, the new public company that manages and is majority owner of Station Casinos LLC, got off to a somewhat rocky start on its first day on the Nasdaq, closing below the initial public offering price. The public offering is expected to yield more than $531 million and is the largest initial public market offering yet in 2016.
The company, listed as RRR on the exchange, closed Wednesday at $18.70, 80 cents, or 4.1 percent below the opening price of $19.50 a share.
In early trading Wednesday, the issue had climbed to $19.18 before dipping to a low of $18.25.
The company priced 27.2 million shares of Class A stock at the $19.50 price. The company granted underwriters a 30-day option to purchase up to an additional 4 million shares at that price. The offering is due to close on Monday.
Several companies are managing the offering led by Deutsche Bank Securities. Securities and Exchange Commission filings say proceeds of the offering are being used to acquire Fertitta Entertainment, headed by CEO Frank Fertitta III and his brother, Lorenzo, a board director, for $460 million.
Despite the new corporate name, the company, which owns and operates 16 locals casinos across Southern Nevada, will keep its Station Casinos identity. In addition to the Red Rock Resort in Summerlin and Green Valley Ranch Resort in Henderson, the company owns the Palace, Boulder, Sunset, Santa Fe and Texas Station casinos as well as the two properties under the Fiesta Casinos brand.
It also has several smaller casinos without hotels with the Wildfire brand. It also has a 50 percent interest in Barley’s Casino & Brewing, Wildfire Casino & Lanes and The Greens in Henderson.
The company manages the Graton Resort & Casino in Northern California and holds a 50 percent interest in MPM Enterprises LLC to manage the Gun Lake Casino in southwestern Michigan, both tribal casino operations.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Find him on Twitter: @RickVelotta
