Harrah’s in $17 bn acquisition

22nd Dec 2006

Harrah’s Entertainment, Inc. has entered into a definitive agreement for affiliates of Texas Pacific Group (TPG) and Apollo Management, L.P. to acquire Harrah’s in an all-cash transaction valued at approximately $27.8 billion, including the assumption of approximately $10.7 billion of debt.

Under the terms of the agreement, Harrah’s stockholders will receive $90.00 in cash for each outstanding Harrah’s share. This represents a premium of approximately 36 percent over Harrah’s closing share price on September 29, 2006, the last trading day before disclosure of the initial offer made by Apollo and TPG to acquire Harrah’s for $81.00 per share.

“In Apollo and TPG, we will have owners who share our vision for Harrah’s, are fully supportive of our current strategy and are committed to helping us execute on it. This will be a change in ownership, not a change in direction,” Gary Loveman, Harrah’s chairman, chief executive officer and president. “Harrah’s management team and its 85,000 talented employees look forward to working with Apollo and TPG as the company moves into the next phase of its growth and development.”

Under the merger agreement, Harrah’s may solicit superior proposals from third parties during the next 25 days, but the transaction is expected to be completed in approximately one year, and is subject to stockholder approval, regulatory approvals, and customary closing conditions. It is not subject to a financing condition.


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