It’s a great day if you own a lot of Harrah’s stock–especially if you bought it back in 1998, when it was trading at around $20 a share. The company has reportedly accepted a buyout offer. This breaking news comes from the IHT:
Harrah’s Entertainment Inc., the world’s largest casino company, has agreed to a $90 per share buyout offer from two private equity groups, said a person with knowledge of the negotiations.
The agreement with Apollo Management Group and Texas Pacific Group came late last week but lawyers for both sides have been working out the details, said the person, who spoke on condition of anonymity because of the sensitivity of the talks.
An official announcement on the deal could come as early as Tuesday, the person said Monday.
The deal values Harrah’s at $16.7 billion (€12.75 billion).
I’ve heard that the new owners will keep the existing management team in place, but there’s no consensus over whether Harrah’s plans for the Center Strip will continue or are on hold. There’s solid reasons to go either way, and until there’s an official announcement, it’s anyone’s guess. If I were a betting man, I’d lay odds on the sale of the Rio and possibly Showboat (Atlantic City), if anything. I’d be astounded if anything from the Center Strip is sold.
One question no one has asked yet (at least that I’m aware of) is what this means for the World Series of Poker. Everyone is assuming that the new Harrah’s will keep the poker tournament, but on the balance sheet it’s just another property that, for the right price, might be up for grabs. I haven’t even heard rumors about this so far, but you’ve got to admit that there is at least a possibility that this asset, which includes no real estate, could be sold if the company wants to concentrate on maximixing its Strip and near-Strip land holdings.