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Mergers and Acquisitions : Buyout Deal Clears Obstacle21 February 2005
By Howard Stutz
Harrah's $9.4 billion buyout of Caesars Entertainment on Friday cleared the waiting period spelled out by the federally mandated Hart-Scott-Rodino Act, but the transaction still awaits action by the Federal Trade Commission.
The law, which was enacted in 1976, sets a time period for parties to file objections about a corporate merger. Harrah's spokesman Gary Thompson said no challenges had been listed.
In January, the companies announced they were in substantial compliance with the FTC's request for additional information on the merger. Friday's announcement does not preclude the commission from bringing an action that challenges the transaction.
In a joint statement, the companies said expiration of the Hart-Scott-Rodino waiting period was a condition for the merger, which executives have stated they would like to close by the end of June.
The formation of the world's largest casino company still has many hurdles to clear.
Gaming regulators in the states in which the companies operate casinos, including Nevada, New Jersey, and Mississippi, must sign off on the buyout. Traditionally, Nevada's gaming bodies wait until the FTC acts on a merger before acting.
Harrah's and Caesars have scheduled shareholder meetings on March 11 at which stockholders may vote on the merger.
During Harrah's recent quarterly earnings announcement, executives began to paint a picture of how the merged company would operate.
Chairman and Chief Executive Officer Gary Loveman said Harrah's will have three main brands -- Caesars, Horseshoe and Harrah's -- along with several other brand-name properties, such as Bally's, Rio and Paris Las Vegas. Loveman said the primary brands will offer Harrah's opportunities to expand both domestically and internationally, such as in Singapore and the United Kingdom.
Last July, when the merger was announced, Harrah's and Caesars managed a combined 56 casinos throughout the United States. Since the fall, the companies have pared some of their holdings in places that the FTC could have antitrust concerns.
In September, the companies said Colony Capital had agreed to buy four properties: Harrah's East Chicago, Harrah's Tunica (Miss.), Atlantic City Hilton and Bally's Tunica (Miss.), for $1.2 billion. A month later, Caesars agreed to sell Bally's Casino New Orleans to Columbia Sussex for $24 million. In November, Caesars agreed to sell Caesars Tahoe to Columbia Sussex for $45 million.
Harrah's Entertainment shares fell 5 cents, or 0.07 percent, Friday to close at $69.38. Caesars Entertainment shares were unchanged Friday, closing at $20.75.
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Mergers and Acquisitions : Buyout Deal Clears Obstacle is republished from Online.CasinoCity.com.