Harrah's Entertainment has received a new leveraged buyout offer from a combination of Apollo Management LP and Texas Pacific Group valuing the international casino operator at $90 a share - a 13% premium over the current price of $79.50 a share. The deal could be approved as early as today, although several media sources are reporting the deal as currently stalled over "unknown stumbling blocks." According to the NY Times, "'Some of the points are deal breakers,' one person said. 'but I think we’ll eventually get over them.'" Earnings for Harrah's last year came in at just $236.4 million on revenue of $7.1 billion, including nearly $11 billion in debt which means the full value of the takeover is really more than $27 billion. The deal would mean executives from Apollo and Texas Pacific would have to undergo a lengthy casino-licensure process in every jurisdiction where Harrah's operates casinos, delaying the full transfer of Harrah's properties by 12 to 18 months (if the deal failed to be completed by then, the prospective buyers would face penalty payments). The bid comes on the back of an $87-a-share cash-and-stock offer from regional casino operator Penn National Gaming Inc.
• Sources: Bloomberg, NY Times, Wall Street Journal, MarketWatch
• Related commentary: Who Will Acquire Harrah's This Time?, Penn National Bids For Much Larger Casino Peer Harrah's , Valuing the Casino Industry: Are There More Harrah's Out There?
• Potentially impacted stocks and ETFs: Harrah's Entertainment, Inc. (HET), Penn National Gaming Inc. (PENN). Competitors: Wynn Resorts (WYNN), Boyd Gaming Corporation (BYD), MGM MIRAGE (MGM), Las Vegas Sands Corp. (LVS), Trump Entertainment Resorts (TRMP).
Seeking Alpha's news summaries are combined into a pre-market briefing called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only a few seconds to sign up.