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Harrah's Receives $15B LBO Offer

LAS VEGAS-The casino operator receives a proposal from Apollo Management and Texas Pacific Group to acquire all of the company's outstanding common stock for $81 per share in cash; Harrah's share price up 16%.

By Brian K. Miller | Updated on October 02, 2006

LAS VEGAS- Apollo Management and Texas Pacific have offered to acquire all of the outstanding common stock of Harrah’s Entertainment Inc. for $81 per share in cash ($15.05 billion) plus debt. The offer represents a 22% premium to the stock’s Friday closing price on the New York Stock Exchange. This morning, Harrah’s stock is trading for between $75.10 and $80.01 and at noon EST stood at $75.93, up 14.27% on the day.

Harrah’s Board of Directors has formed a special committee of non-management directors to review the proposal from the private equity firms. Harrah’s made clear that the company has not determined that such a “transaction is in the best interests of Harrah’s and its stockholders or that Harrah’s should not continue as an independent public company pursuing its business plan as the world’s largest provider of branded casino entertainment.”

Prior to learning the offering price, JP Morgan Securities gaming analyst Harry Curtis issued a statement this morning expressing skepticism about the likelihood of the transaction being consummated, saying Harrah’s long term growth strategy do not mix. In so doing, Curtis cited today’s other Vegas news: a Las Vegas Strip land swap between Harrah’s and Boyd where in Boyd would get an additional 24 acres next to its planned Eschelon Place development and Harrah’s would get the Barbary Coast Hotel and Casino (To see that story, click here).

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