In this episode, the hosts do a deep dive into a $30bn LBO of Caesars Palace by Apollo and TPG. They discuss the deal structure, financing terms, and motivations of private equity titans. The podcast explores leverage buyouts, restructuring, and the roles of parent company, operating company, and subsidiary. It also provides an overview of LBO structure and the background of the deal.
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Caesars LBO: Huge Deal, Huge Risks
Caesars Palace LBO was a $30 billion deal led by Apollo and TPG, relying heavily on debt and a small equity contribution.
The financial crisis shortly after the deal triggered a cascade of financial distress and restructuring drama.
insights INSIGHT
Capital Structure Hierarchy Explained
In capital structures, senior creditors get paid first and have lower risk, while equity holders are last and face high risk for high reward.
Private equity firms usually face losses first in bankruptcy, but Caesars' deal complicated this hierarchy for their advantage.
insights INSIGHT
Club Deals and Co-Investing
Apollo and TPG contributed less than half of the equity themselves; co-investors like Blackstone, Goldman Sachs, and others covered the rest.
Such large club deals were common pre-2008 but later fell out of favor due to operational conflicts and regulatory issues.
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Private equity is one of the most coveted job opportunities on the buyside in the current market environment. In this episode, we do a deep dive into a Leveraged Buyout (“LBO”) using one of the largest, craziest deals in history: the $30bn LBO of Caesars Palace by Apollo and TPG. In part 1 of this 3-part series, we discuss the deal structure, explain the financing terms, and help you understand the motivations of the private equity titans at the helm of the world's biggest megafunds. We will walk you through the LBO from start to finish using Financial Times writer Sujeet Indap's fantastic book, Caesars Palace Coup.
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