Harrah's Gets $15 Bln Takeover Bid From Apollo Management, Texas Pacific

INTERESTING TIMING!!!!!!!!

RTTNews) - Monday, Harrah's Entertainment, Inc. (HET) confirmed the receipt of offer from Apollo Management and Texas Pacific Group to acquire all of its outstanding common stock for $15.05 billion or $81.00 per share in cash.

The offer is a 22% premium to Harrah's Friday's closing price of $66.43. Following the news, the stock is trading up by more than 14%.

The Harrah's Board has formed a Special Committee consisting of all non-management directors to review the proposal. The Special Committee has retained UBS Securities LLC as its financial advisor and Kaye Scholer LLP as its legal advisor to assist the Special Committee. Harrah's operates about 40 casinos, including Caesar's Palace in Las Vegas, its namesake chain, Bally's, Horseshoe, Showboat and other brands throughout the country. The Las Vegas-based company boosted its portfolio through Caesars Entertainment acquisition in last year.

However, the company's shares have declined over the past year, amid concerns among investors about volatility in Las Vegas, missed opportunities overseas and higher competition in Atlantic City.

Harrah's shares on Friday closed at $66.43, down from their 52-week high of $83.33. Last month, JP Morgan downgraded its rating on Harrah's shares from an "Overweight" to a "Neutral.

In a separate release, Harrah's said it entered a deal with a unit of Boyd Gaming Corp. (BYD) to exchange about 24 contiguous acres that Harrah's controls on the Las Vegas Strip for Boyd's Barbary Coast Hotel and Casino. Financial terms for that deal were not disclosed.

The addition of the Barbary Coast to Harrah's holdings in the area considerably strengthens the company's ability to create a destination experience within the Las Vegas market.

The real-estate transaction is expected to close in the first quarter of 2007, subject to customary closing conditions. Boyd said it expects to see a non-cash gain of about $280 million in the quarter the deal closes.

In August, Harrah's revealed the terms of cash offer to acquire all of the outstanding ordinary shares of London Clubs International plc for GBP 1.25 per share, or about $530 million. If successful, Harrah's expects the transaction to close in the fourth quarter of 2006.

For the recently concluded second quarter, Harrah's net income increased 22% to $128.6 million from $105.8 million in the last-year quarter. On a per share basis, net income declined to $0.70 from $0.86 in the year-ago quarter.

Adjusted net income from continuing operations rose 10.5% to $0.95 per share from $0.86 per share in the last-year quarter.

Revenues for the quarter climbed 67% to $2.37 billion from $1.42 billion in last-year quarter. Wall Street analysts estimated revenues of $2.36 billion for the quarter.

Harrah's stock is currently up by $9.47 or 14.26% and trading at $75.90, after opening at $75.42.