Heavily indebted casino operator Caesars Entertainment Corp said it would split itself into two companies, with private-equity firms Apollo Management LP and TPG Capital intending to invest $250
million each in a new growth-oriented business.

Caesars said on Tuesday it would retain majority ownership of the new entity, Caesars Growth Partners LLC, which is intended to improve the company's capital structure and allow it more flexibility to pursue new projects.

Caesars shares leaped 31 percent after the announcement to one-month high of $16.36, before easing back to $16.25. The transaction could see up to $1.2 billion raised with contributions from existing shareholders, the company said.

Caesars Growth Partners will take over the company's online business, Caesars Interactive Entertainment, as well as the Planet Hollywood Resort & Casino in Las Vegas, and Caesars' interests in the Horseshoe Baltimore casino under development.

Caesars Entertainment had $24.1 billion of debt outstanding as of Dec. 31, according to a regulatory filing.