Harrah's Accepts Private Equity Offer of $90 Per Share

Harrah's Entertainment has approved the $17.1 billion buyout offer from Apollo Management LP and Texas Pacific Group. The is the fourth largest private equity buyout ever. The company announced that shareholders will receive $90 per share. The deal includes the assumption of $10.7 billion in debt, bringing the transaction total to $27.8 billion. Two months ago, the buyout firms initially offered $15.1 billion or $81 per share. The current deal is a 35% premium over the share price at the end of September, before the deal was announced. Harrah's had $1.08 billion in earnings through September, almost double its 2005 earnings. Harrah's CEO Gary Loveman said he doesn't expect any major changes in corporate strategy or operations. Harrah's operates 46 casinos in the U.S. and 11 overseas. Shares of Harrah's climbed 14 cents to $82.32 yesterday.
• Sources: Bloomberg, WSJ, Reuters
• Related commentary: Who Will Acquire Harrah's This Time?, Valuing the Casino Industry: Are There More Harrah's Out There?, Harrah's Seems Underwhelmed by Buyout Offer, Harrah's Receives Yet Another (Better) Buyout Offer
• Potentially impacted stocks and ETFs: Harrah's Entertainment, Inc. (HET) Competitors: Penn National Gaming Inc. (PENN), Wynn Resorts (WYNN), Boyd Gaming Corporation (BYD), MGM MIRAGE (MGM), Las Vegas Sands Corp. (LVS), Trump Entertainment Resorts (TRMP).

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