Harrah's to buy Caesars for more than $5 billion

By Adam Goldman
Associated Press

LAS VEGAS — Harrah's Entertainment Inc. agreed yesterday to buy Caesars Entertainment Inc. for more than $5 billion in a deal that would create the world's largest gambling company, a source familiar with the talks said yesterday.

The boards of the two Las Vegas-based companies agreed in principle to the deal, the source said. But the companies have some issues that are unresolved, according to the the source.

The source said Harrah's would buy Caesars for about $17 per share or more than $5 billion in the stock and cash deal. Harrah's also will assume approximately $4 billion in Caesars Entertainment debt.

The companies were expected to announce the agreement early today. Executives with both companies did not return several calls late yesterday.

The source said Harrah's and Caesars began negotiating after MGM Mirage completed a deal last month to buy Mandalay Resort Group for $4.8 billion in cash. That deal — plus the newer, larger combination — will face intense scrutiny from federal and state gambling regulators.

News of the possible buyout sent Caesars shares up nearly 15 percent yesterday, while Harrah's stock slipped.

Harrah's Entertainment has 26 casinos in 13 states under the Harrah's and Showboat names. It has about 41,000 employees.

Caesars has 27 properties in five countries on four continents, including Caesars Palace and Bally's Las Vegas, and employs 54,000.