Harrah's Entertainment Inc. Poised to Accept $16.7-Billion Private-Equity Bid

Strategic Insights -

Gary Loveman, the chairman and chief executive officer of Las Vegas-based Harrah's Entertainment Inc., is expected to remain at the helm of the world's largest casino operator by revenue if a deal with Apollo Management and Texas Pacific Group is completed. The company's plans for a redevelopment of its properties and vast land holdings along the Las Vegas Strip, which includes new hotel rooms, retail, and restaurant offerings, are also expected to proceed as planned. A deal, valued at $90 a share in cash, would be one of the largest private-equity buyouts in history and would allow Harrah's to streamline its organization by shedding some of its 39 casinos around the United States.

Key Takeaways:

  • Harrah's Entertainment Inc. is poised to accept a $16.7-billion private-equity bid from Apollo Management and Texas Pacific Group, valued at $90 a share in cash.
  • The deal would be one of the largest private-equity buyouts in history and would value Harrah's at $16.7 billion.
  • Gary Loveman, Harrah's chairman and CEO, is expected to remain at the helm of the company.
  • The plan for the redevelopment of Harrah's properties and land holdings along the Las Vegas Strip includes new hotel rooms, retail, and restaurant offerings.
  • The deal would allow Harrah's to streamline its organization by shedding some of its 39 casinos around the United States.
  • Harrah's has a market value of about $14.8 billion and earned $236.4 million on revenue of $7.1 billion last year.
  • As of September 30, Harrah's was carrying about $11 billion of debt.

Statistics:

  • The proposed deal would value Harrah's at $90 a share in cash.
  • The deal would be one of the largest private-equity buyouts in history.
  • Harrah's has a market value of about $14.8 billion.
  • The company earned $236.4 million on revenue of $7.1 billion last year.
  • As of September 30, Harrah's was carrying about $11 billion of debt.
  • The deal would be expected to close within 12 to 18 months.

Sources:

  • Bloomberg, "Harrah's Entertainment Shares Rise on $90-a-Share Bid (Update2)", by Peter Sanders and Dennis K. Berman
  • Bloomberg, "Station Casinos Gets $81-a-Share Bid, Considers Sale", by Maggie Carter
  • Bloomberg, "Penn National Gaming Enters Casino Spree with $3.5 Billion Bet", by Alyson Hale