Harrah's Agrees to buy London Clubs

The world’s biggest casino operator, Las Vegas based Harrah’s Entertainment which owns 40 casino properties world wide, has agreed to buy British based casino group London Clubs for $530 million (£278 million). The move will give Harrah’s a strong foothold in the rapidly expanding market of Europe.

The board of directors at London Clubs have given their support for the deal in which Harrah’s will pay 125 pence per share. The deal should have fully gone through by the end of the fourth quarter this year, pending regulatory approval.

Harrah’s move into Great Britain comes at a key time as the nation is working to deregulate the industry and change its casinos from small members-only clubs as they currently stand into huge gambling and leisure complexes dubbed ‘supercasinos’. Harrah’s are also hoping that its owning of London Clubs will provide an ideal stepping stone for the companies hoped expansion into Europe. Harrah’s is already working on projects in Spain and Slovenia.

Harrah’s first ventured into Europe last November when it agreed a $700 million joint venture with a local casino group to build a luxury casino on Slovenia’s boarder with Italy. In the very same month Harrah’s agreed another joint venture in Spain to build a $670 million casino modelled on Ceasers Palace in Las Vegas.

London Clubs Chief Executive Bill Timmins commented, “Harrah’s has a lot of operations coming up in Europe in the next few years and we understand Europe…We’ve been in France and we understand Spain.”

Harrah’s also operates two casino’s in Egypt, one in South Africa and has a consulting stake with another in Lebanon. However it is really the UK and Europe that Harrah’s has its eyes on.

Harrah's Chief Executive Gary Loveman said: "London Clubs International has one of the leading positions in the UK casino market and through the new licences that it has recently been awarded will be able to further enhance its position."

London Clubs currently operates a total of six clubs in Britain and crucially already holds licenses to develop five more. The company is also bidding for the upcoming licenses to build new Las Vegas style supercasinos.

Analyst Mathew Gerard at Investec Securities commented, “The key value in London Clubs lies not within the existing casino estate, but within the pipeline of development sites.”

Shares in London Clubs jumped 32 percent to 130 pence by 10.13 am on the morning of the announcement, valuing the group at approximately £290 million. 

Gambling Press - 2006-09-06 12:43:07

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