Harrah’s sale for USD 28 billion is final

The deal by two private equity firms to acquire Harrah’s Entertainment Inc. for USD 27.8 billion closed yesterday and shifted control of the world’s largest gambling company to private hands for the first time.

The transaction includes four Atlantic City casinos and six on the Las Vegas Strip.

The deal by Apollo Management L.P. of New York and Texas Pacific Group Capital L.P. of Fort Worth, Texas, for Harrah’s Entertainment is ranked as one of the largest leveraged buyouts in U.S. history, according to Thomson Financial.

The price for the Las Vegas company includes the assumption of about USD 10.7 billion of Harrah’s debt.

„It’s terrific for [Atlantic] City and great for Harrah’s,“ said attorney Paul O’Gara, who represented Apollo and Texas Pacific in the deal. „Harrah’s now has private ownership, and it is a private company.“

Under the terms of the agreement, Harrah’s stockholders receive USD 90 in cash for each share of Harrah’s common stock.

It’s taken just more than a year to close the deal that was first announced on Dec. 6, 2006. The gaming control boards of several jurisdictions where Harrah’s owns properties have had to sign off on it.

The New Jersey Casino Control Commission gave a 5-0 approval of the merger in mid-October. It was at that hearing that Gary Loveman, Harrah’s Entertainment chairman, chief executive officer, and president announced that the current management and operational structure of the gaming company would remain intact.

„We’re very pleased that the deal closed,“ said Gary Thompson, spokesman for Harrah’s Entertainment. „It’s good for our shareholders and will be good for our new owners and our customers, communities and employees.“

Combined, Harrah’s four casinos in Atlantic City – Bally’s, Caesars, Harrah’s Marina and Showboat – accounted for 44 percent of last year’s USD 4.9 billion total gambling revenue in the seaside resort.

Worldwide, Harrah’s owns more than 50 properties that include casinos on land and in ships, and a golf course in Macao in South China. It is completing a 961-room, 44-story hotel tower, called Harrah’s Waterfront Hotel, that the company plans to open by May in Atlantic City’s Marina District.

It is also co-owner of the Chester Casino & Racetrack – a Pennsylvania slots parlor with more than 2,700 slot machines – in the city of Chester.

Harrah’s stock ceased trading on the New York Stock Exchange, the Chicago Stock Exchange, and the Philadelphia Stock Exchange at the close of the markets yesterday.