Harrah's Receives $15bn Buyout Offer

03-Oct-2006, 12:32

Harrah's Entertainment Inc., the world's biggest casino operator, on Monday said it received a $15 billion buyout offer from private equity firms Apollo Management and Texas Pacific Group.

Las Vegas-based Harrah's said it formed a special committee of its non-management directors to review the proposal.

The proposed deal, valued at $81 cash per share -- a 22% premium to Harrah's closing price on Friday -- would rank as one of the largest private equity buyouts on record.
The offer comes just as Harrah's puts the finishing touches on its plans to beef up its presence on the Las Vegas Strip, by acquiring Boyd Gaming Corp.'s Barbary Coast Hotel and Casino. After buying Caesars Entertainment last year, Harrah's now controls some 350 acres of prime strip property.
Harrah's shares rose 16.6 percent to $77.50 in early trading on the New York Stock Exchange. The proposed deal is the latest sign of aggressive private equity investors jumping on attractive targets.

This July, an investor group including Bain Capital, Kohlberg, Kravis Roberts and Merrill Lynch struck a deal to buy Hospital operator HCA Inc. for about $21 billion plus debt.
Harrah's gave no indication that it would agree to a buyout deal. 'The Special Committee has not determined that a transaction is in the best interests of Harrah's and its stockholders,' it said in a statement.