Harrah's reportedly accepts $16.7b buyout bid

LAS VEGAS -- Harrah's Entertainment Inc., the world's largest casino company, has agreed to a $16.7 billion buyout offer from two private equity groups, two people with knowledge of the negotiations said.

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 sources, who spoke on condition of anonymity because of the sensitivity of the talks.

An official disclosure of the deal could come as early as today, these people said yesterday. A third person close to the matter, who also spoke on condition of anonymity, said a final agreement was very close.

Spokesmen for Harrah's, Apollo, and Texas Pacific declined to comment.

The deal values Harrah's at $90 per share and represents a 36 percent premium over Harrah's share price on Sept. 29, the last trading day before Apollo and Texas Pacific first proposed a buyout Oct. 2. The group would also assume $10.7 billion in debt.

Deliberations by a special committee of Harrah's board began after a deadline of Tuesday last week for offers. Penn National Gaming Inc., a Wyomissing, Pa.-based racetrack and casino operator, was eliminated from the bidding with its reported bid for $87 per share, mostly in cash. A Penn spokesman did not immediately return calls for comment.

The decision ends more than two months of silence following the original offer by Apollo and Texas Pacific for $81 a share.

Shares of Harrah's rose $2.68, or 3.4 percent, to $82.18 on the New York Stock Exchange.

The deal is the biggest to take a public casino company private and ranks as the seventh-largest leveraged buyout ever, according to Thomson Financial. The largest ever was RJR Nabisco Inc.'s $25 billion acquisition by Kohlberg Kravis Roberts & Co. in 1998.