Posted on: Friday, July 16, 2004
Harrah's-Caesars deal shifts casino hierarchy
By Adam Goldman
Associated Press
LAS VEGAS — Harrah's Entertainment Inc.'s $5.2 billion deal to buy Caesars Entertainment Inc. would rearrange the industry's hierarchy, creating the world's largest gambling company and leaving two casino giants controlling most of the Las Vegas Strip's most-prized megaresorts.
Associated Press Harrah's not only leapfrogs MGM Mirage on the world stage, it gains the high-profile place it has long sought in Las Vegas — if regulators approve the deals, possibly by next year.
The transactions would leave 15 major hotel-casinos in the gambling capital in the hands of the two combined companies, and both competing for a broad spectrum of tourists. Of the 32 hotel properties on the Strip, about 25 are considered major.
"These are the right assets for the development of our strategy," Gary Loveman, Harrah's president and chief executive, said in a conference call to announce the agreement. "We believe that these assets are worth more in our hands than in the incumbent's hands."
Under terms of the deal, Harrah's will pay $1.8 billion in cash and exchange about $3.4 billion in Harrah's stock for all shares of its Las Vegas-based rival.
The blockbuster deal announced yesterday eclipses last month's $4.8 billion MGM Mirage merger with Mandalay Resort Group.
If regulators approve Harrah's Entertainment's $5.2 billion deal to buy Caesars Entertainment, it could become one of two gambling giants in control of many major hotel-casinos in Las Vegas.
