Casino giant accepts offer
The private equity groups of Texas Pacific Group and Apollo Management have almost completed the buyout of the world’s largest casino operator, Harrah’s Entertainment, after protracted talks for two months.
Harrah’s owns 35 casinos including legendary Las Vegas-based casinos such as Caesar’s Palace and The Flamingo. They also recently acquired UK casino operator London Clubs International (LCI).
Harrah’s have agreed to an offer of $90 a share, which values the deal at around $17.1 billion. Harrah’s had previously rejected an offer of $81 a share when discussions first began.
Harrah's chairman and Chief Executive, Gary Loveman, said: “In Apollo and TPG, we will have owners who share our vision for Harrah's, are fully supportive of our current strategy and are committed to helping us execute it. This will be a change in ownership, not a change in direction.”
Under the terms of the deal, which is still subject to shareholder backing and regulatory approval, Harrah’s is able to seek out bigger offers over the next 25 days. However, Loveman doubts that anyone will come in a beat the offer from the private equity firms.
"I don't expect further bids, but anything is possible," Loveman added.
His belief is also backed up by Morgan Stanley analyst, Celeste Brown.
“We believe Harrah's board did everything it could to maximize the price,” she said.
“Given the extensive process that led to this agreement, we wouldn't expect any more offers to be announced.”
According to Thomson Financial, the deal for Harrah’s, excluding debt, is the seventh largest leveraged buyout in history. The deal will add to Harrah’s debt load but Loveman refused to disclose an exact figure.
Editor, Jackpot.co.uk - 2006-12-20 11:00:43