Harrah’s in talks to buy Caesars
LAS VEGAS – Harrah’s Entertainment Inc. is negotiating to buy gambling rival Caesars Entertainment Inc. and leapfrog ahead of the proposed merger of MGM Mirage and Mandalay Resort Group as the biggest gambling company in the world.
The two Las Vegas-based companies could announce an agreement this week, a source close to the talks said Wednesday.
“The likelihood is high,” the source said, speaking on condition of anonymity. “Things are moving along.”
The companies began negotiating after MGM Mirage cemented a deal last month to buy Mandalay Resort Group for $4.8 billion in cash, the source said. That deal must be approved by federal and state gambling regulators.
Terms of the possible Harrah’s-Caesars deal were not available; Caesars’ market value stood at about $5 billion Wednesday; the company also has nearly that amount in debt.
Top executives at both companies did not take phone calls Wednesday and messages left with spokesmen were not immediately returned.
News of the possible buyout, reported Wednesday by The Wall Street Journal and the Las Vegas Review-Journal, sent Caesars shares up nearly 15 percent, while Harrah’s stock slipped.
Harrah’s, which is heavily into riverboat casinos, has 26 casinos in 13 states under the Harrah’s and Showboat names — and has 41,000 employees.
Harrah’s Entertainment recently completed its $1.45 billion merger with Horseshoe Gaming Holding Corp. The Horseshoe casinos are in Bossier City, La.; Tunica, Miss.; and Hammond, Ind. The Horseshoe merger made Harrah’s – for the time being – the largest casino company in the world.
To appease regulators, Harrah’s sold its Shreveport, La., casino to Boyd Gaming Corp. for $190 million. It also owns and operates Harrah’s Louisiana Downs in Bossier Parish.
Caesars recently has emerged from a turbulent period, which saw its stock dip below $7 and its chief executive leave in 2002. Thomas E. Gallagher, who is running for Congress in Nevada, was replaced by Wally Barr.
Barr has been credited for helping the company stabilize its finances and revive its foundering stock price.