The Apollo Management and Texas Pacific Group submitted a proposal to Harrah's Entertainment, Inc. to acquire all of Harrah's outstanding common stock for $81 per share in cash, a 22% premium to the company's closing price on Friday. The Harrah's Entertainment, Inc. Board of Directors confirmed the proposal Monday.
There is no assurance that Harrah's will enter into this transaction, but a special committee of non-management directors has been assembled to review the proposal. The committee retained UBS Securities LLC as a financial advisor and Kay Scholer LLP as a legal advisor.
If Apollo Management and Texas Pacific Group is successful in its bid and can overcome the hurdles required to gain licensing in the various states where Harrah's has casinos, it could open up the market for other private equity companies to look into gaming businesses in the future.
There are no indications yet what Harrah's will do with the proposal. According to a press release from Harrah's Entertainment, Inc., "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 as the world's largest provider of branded casino entertainment."
Founded in 1937, Harrah's Entertainment, Inc. has grown to include nearly 40 casinos in three countries, primarily under the Harrah's, Caesars, and Horseshoe brand names. The company also owns and runs the World Series of Poker in Las Vegas.