Top > Business > 2006 > December > 2006-12-28

Harrah`s to be Sold for $17.1 billion

The world`s largest casino chain, Harrah`s Entertainment, has agreed to be purchased by two investment funds, the Apollo Management Group and the Texas Pacific Group, for $90 a share. The investment funds will also accept the company`s debt of $10.7 billion. The two investment funds offered to pay $15.1 billion representing $81 a share, over two months ago. This purchase is the largest deal in casino history.

Harrah`s stock gained 0.2% before its trading was stopped with the announcement of the sale. Apollo Management Group is a private equity firm founded in 1990 by Leon Black. It is based in New York and holds offices in Los Angeles and London. It has invested over $16 billion in companies inside and outside the U.S. Texas Pacific is a private equity investment firm founded by David Bonderman, James Coulter and William Price in 1992. It owns offices in Fort Worth, San Francisco, London and New York City and runs about $20 billion in investments. Private investment companies have been investing in the casino business since 1998, when Colony Capitol acquired Harveys Casino Resorts for $420 million. The same company also purchased Hilton Casino-Hotel in Las Vegas for $280 million, in 1998.

Harrah`s Entertainment, Inc. is the largest gaming company in the world, with annual revenues around $7.11 billion, it owns and operates casinos, hotels, and five golf courses under several brands. The company is currently based in Las Vegas, Nevada. The company was founded in 1937 by William F. Harrah. Initially the company was nothing but a small bingo parlor in Reno, Nevada. Before the deal can be finalized it has to be authorized by both the share holders and regulators.