London Clubs stakeholder takes new Harrah's bid

Harrah's Entertainment, two days after extending a deadline for shareholders in London Clubs International to accept a buyout offer, sweetened the deal late Friday to the British casino operator's largest stockholder -- an offer the stockholder accepted.

Las Vegas-based Harrah's said in a statement that a subsidiary of Malaysia-based Genting International, which holds almost 30 percent of London Clubs, agreed to sell its shares to Harrah's at a price higher than the company's previous offer.

On Aug. 31, Harrah's said it would pay 1.25 pounds per share for London Clubs, which is traded on the London Market. Genting is accepting 1.35 pounds per share from Harrah's.

The deal means Harrah's will pay $570 million for London Clubs, an additional $40 million above the original offer.

London Clubs operates seven casinos in the United Kingdom and has four other casinos under development. The company also manages two casinos in Egypt, a casino in South Africa and has a consulting agreement with a casino in Lebanon.

Analysts viewed the deal as way for Harrah's, which operates 39 casinos in 13 states, to expand its international presence. The company previously announced plans to build casinos in Slovenia and Spain, but recently dropped out of the running to build a casino in Singapore.

"We are encouraged that our offer for London Clubs International will be successful based on our agreement to purchase Genting's London Club shares," Harrah's Chairman Gary Loveman said in a statement Friday.

The transaction was announced after trading closed on the New York Stock Exchange. Shares in Harrah's closed Friday at $73.96, up a penny or 0.01 percent.

On Wednesday, Las Vegas-based Harrah's extended the deadline for London Club shareholders to accept the tender offer until Nov. 4. Harrah's has said it hopes to complete the purchase of London Clubs by year's end.

Harrah's, itself, is the subject of a buyout offer from two private equity groups seeking to take the casino operator private.

Texas Pacific Group of Fort Worth, Texas, and New York-based Apollo Management Group have offered to buy all outstanding share of Harrah's for between $83 and $84 a share, a deal totaling more than $15.5 billion. An initial offer was first announced on Oct. 2.

Harrah's said a special committee of its nonmanagement board of directors is evaluating the offer.

The buyout offer wasn't mentioned Friday. Loveman said the London Clubs deal would help Harrah's expand further in the British gaming market once gaming laws are loosened in England, allowing for Las Vegas-style casinos.

"The strong collection of London Club properties would put Harrah's in a strong position to take advantage of the evolving regulatory framework in the United Kingdom," Loveman said. "The multinational operational experience of the London Club's management strengthens Harrah's existing team, enhancing the success for international expansion opportunities."