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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Harrah's-Caesars Merger: Nevada Hearings Will Wait

6 June 2005

Nevada's gaming regulators will have to wait a few extra days before deciding if Harrah's Entertainment can acquire Caesars Entertainment for $9.4 billion.

The Federal Trade Commission won't make a decision on the antitrust matters surrounding the Harrah's-Caesars merger until Wednesday at the earliest. That will require Nevada's regulatory panels, the Gaming Control Board and the Nevada Gaming Commission, to take the unusual step of hearing testimony about the transaction on the same day.

The two panels will explore the buyout in separate meetings Friday in Las Vegas. The control board will meet at 9:30 a.m., the commission at 1:30 p.m.

Control board Chairman Dennis Neilander said Harrah's requested the double hearings with hopes of the company closing the deal June 13. Once the deal is completed, Harrah's will be the industry's largest casino operator, with 49 casinos and annual revenues of more than $8 billion.

Harrah's had planned to close the transaction by the end of June, but announced it was pushing the closing date up to June 13, pending regulatory approval.

"We've done this several times over the years," Neilander said Friday about holding back-to-back control board and commission meetings. "Our investigation is complete, but my understanding is there are a few outside issues involving other matters that delayed things with the FTC."

Sources at both Harrah's and Caesars said the FTC is waiting for Louisiana gaming authorities to approve the transfer of the gaming license for the Bally's New Orleans riverboat casino. In October, Columbia Sussex Corp. bought the riverboat from Caesars for $24 million.

The Louisiana Gaming Control Board will meet Tuesday to consider that transaction.

If the sale is approved, the FTC is expected to rule on the Harrah's-Caesars merger by Wednesday at the earliest.

Neilander said Nevada, which traditionally awaits FTC approval before considering a merger between competing gaming companies, would go forward with its hearings, even if FTC approval comes Friday morning.

In 2001, Nevada gaming regulators approved International Game Technology's buyout of rival Anchor Gaming on the same day federal authorities signed off on the deal, Neilander said.

If the FTC hasn't ruled by Friday, Nevada regulators will delay taking action on the deal.

The control board had planned to take up the Harrah's-Caesars merger Tuesday in Carson City.

After announcing the buyout in July, Harrah's and Caesars have both sold some casinos in hopes of avoiding any antitrust implications.

In addition to Bally's New Orleans, Caesars has reached agreements to part with the Atlantic City Hilton, Bally's Tunica, Caesars Tahoe, and the Reno Hilton. Harrah's sold two casinos -- Harrah's East Chicago and Harrah's Tunica.

In a statement Friday, Harrah's announced June 10 as the deadline for Caesars stockholders to request shares of Harrah's common stock in the merger. Caesars stockholders are eligible to receive 0.3247 shares of Harrah's common stock for each share of Caesars common stock owned.

Stockholders not electing to accept Harrah's stock will be entitled to receive $17.75 in cash for each share of Caesars common stock owned.

Shares in Harrah's closed Friday at $72.50, up 3 cents, or 0.04 percent. Shares in Caesars closed at $21.68, up 7 cents, or 0.32 percent.

Harrah's-Caesars Merger: Nevada Hearings Will Wait is republished from Online.CasinoCity.com.