US - Harrah’s board to weigh offers
1.00pm Tuesday December 12, 2006
The board of Harrah’s Entertainment, the world’s largest gambling company, plans to meet this week to consider buyout offers, sources familiar with the matter said today.
Harrah’s has set a deadline of tomorrow (NZT) on all bids and could also consider a leveraged recapitalisation should the bids not prove compelling, one source familiar with the situation said.
On October 2, Harrah’s said a committee of non-management directors was reviewing a takeover offer of US$81 ($119.64) per share from private equity firms Apollo Management and Texas Pacific Group. A week later, a source familiar with the situation said the group had raised the bid to US$83.50 per share, or US$15.5 billion.
Las Vegas-based Harrah’s, which operates casinos under the Harrah’s, Caesars and Horseshoe brand names, has also drawn the interest of another group led by Penn National Gaming Inc and hedge fund DE Shaw.
Penn, which is significantly smaller than Harrah’s, is considering making a cash and stock offer, a source familiar with the situation said two weeks ago.
Private equity firms have turned to the casino sector as they look for cash-rich businesses in which to invest the hundreds of billions of dollars they have raised this year.
Last week, Station Casinos Inc said it had received a US$4.7 billion buyout offer from a group of investors that included management and Los Angeles-based real estate investment firm Colony Capital.
Harrah’s shares have risen 6 per cent since word hit the market on November 29 that a second group might make a bid for the company. Harrah’s has a market value of US$14.8 billion, based on its closing share price on Friday of US$79.59. Penn’s market capitalisation is US$3.2 billion.
Harrah’s was not immediately available for comment today. A spokesman for Texas Pacific declined to comment. Penn National also declined to comment.
- REUTERS
