Harrah's Entertainment, the world's largest casino operator and the parent company of Grand Biloxi, has received a $15.05 billion buyout offer from two private-equity firms. The offer comes before Harrah's has announced specifics about its plans for a major expansion in Biloxi, where the company is acquiring the property of Pinnacle Entertainment and also buying several parcels around its existing casino. A new owner of the company could scale back the expansion plans, cancel them or proceed with development.
The Las Vegas Company confirmed that it has received an offer for $81 a share from Apollo Management of New York and Texas Pacific Group of Fort Worth. If completed, the deal would rank as one of the largest leveraged buyouts in US history, according to Thomson Financial. Including the assumption of $10 billion in debt, the acquisition of Harrah's would rank number four. The biggest deal is the pending purchase of hospital operator HCA Inc. in a transaction valued at $32 billion.
The Company said Harrah's board of directors has set up a special committee of non management directors to review the offer. The committee has retained UBS Securities LLC as financial adviser. "The special committee has not determined that a transaction is in the best interests of Harrah's and its stockholders or that Harrah's should not continue as an independent public company pursuing its business plan," said a company statement.
Harrah's owns seven casinos on the Las Vegas strip and four in Atlantic City. Its casinos in Atlantic City made up 41 percent of the $5 billion in gambling revenue generated by the city's casino industry in 2005.