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Harrah's Entertainment to be Acquired by Texas Pacific Group and Apollo Management in $27.8 Billion Deal

Strategic Insights

— 1 min read

Harrah's Entertainment, Inc., the world's largest provider of branded casino entertainment, has entered into a definitive agreement to be acquired by affiliates of Texas Pacific Group (TPG) and Apollo Management, L.P. in an all-cash transaction valued at approximately $27.8 billion. The transaction, which is subject to stockholder approval, regulatory approvals, and customary closing conditions, is expected to be completed in approximately one year. Under the terms of the agreement, Harrah's stockholders will receive $90.00 in cash for each outstanding Harrah's share, representing a premium of approximately 36% over Harrah's closing share price on September 29, 2006.

Key Takeaways:

  • The transaction is valued at approximately $27.8 billion, making it one of the largest acquisitions in the gaming industry.
  • The acquisition is an all-cash deal, with Harrah's stockholders set to receive $90.00 per share.
  • The acquisition is subject to stockholder approval, regulatory approvals, and customary closing conditions.
  • The Harrah's Board of Directors, based on the recommendation of a Special Committee of non-management directors, has approved the agreement and recommended that Harrah's stockholders vote in favor of the deal.
  • The acquisition is expected to be completed in approximately one year.
  • The Harrah's management team, comprising 85,000 employees, will continue to lead the company under the new ownership.
  • Apollo and TPG have agreed to increase the purchase price at a rate of $0.01973 per day per Harrah's common share beginning March 1, 2008, if closing has not occurred by that date.

Statistics:

  • The transaction value is approximately $27.8 billion.
  • The acquisition premium is approximately 36% compared to Harrah's closing share price on September 29, 2006.
  • The number of Harrah's employees is approximately 85,000.
  • The time frame for the acquisition completion is approximately one year.
  • The daily increase in purchase price is $0.01973 per Harrah's common share starting March 1, 2008.

Sources:

  • Harrah's Entertainment, Inc. press release, dated [no date provided]
  • Texas Pacific Group press release, dated [no date provided]
  • Apollo Management, L.P. press release, dated [no date provided]
  • Securities and Exchange Commission filing, [no date provided]

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