HARRAH'S ENTERTAINMENT SAYS OK TO BUYOUT BID
22 December 2006
Updated 12/19/2006 5:31 PM
By Ryan Nakashima, Associated Press
LAS VEGAS — Harrah’s Entertainment (HET), the world’s largest casino company, said Tuesday that its board has accepted a $17.1 billion buyout offer from two private equity groups.
The agreement with Apollo Management Group and Texas Pacific Group for $90 per share includes the assumption of $10.7 billion in debt, and is the largest deal ever to take a publicly held casino company private.
The price represented a premium of about 36% over Harrah’s closing price on Sept. 29, the last trading day before it announced Oct. 2 that Apollo and Texas Pacific had offered $81 per share to buy the company.
Harrah’s shares rose 12 cents or 0.2% to $82.30 Tuesday on the New York Stock Exchange before trading was halted over news of the deal.
A special committee of Harrah’s board, which excluded chief executive and chairman Gary Loveman, had been meeting in New York since last week after the company set a Tuesday deadline to receive offers.
The board recommended shareholder approval.
“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 on it,” Loveman said in a statement. “This will be a change in ownership, not a change in direction.”
Texas Pacific founding partner David Bonderman said he believed the private equity pairing would be able to “help Harrah’s deliver on its growth strategy” with a long-term perspective.
The group made no immediate mention of large scale redevelopment plans in Las Vegas and Atlantic City, which Harrah’s had previously said it would unveil by early next year.
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