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Park Place Stock May Get A Boost From Buyback Authorization

LAS VEGAS, Nevada – Nov. 14, 2000--Park Place Entertainment Corp. of Las Vegas on Friday announced plans to repurchase as many as 20 million shares of its own stock.

The share repurchase plan, authorized by the company's board of directors, took effect Friday and will remain in effect until terminated by the board. When added to an earlier share repurchase plan, Park Place is now authorized to buy back as many as 25 million shares, or more than 8 percent of the company's stock.

Such repurchases could help Park Place's stock price by creating demand for shares; on Friday, the stock closed at $12.38, its lowest close since mid-July.

"It offers them an opportunity to invest in the company," said William Schmitt, gaming analyst with CIBC World Markets. "They likely will (buy shares), if the stock drops more. It's the prudent thing to do."

Park Place said the shares purchased will be used to fulfill company obligations under employee stock option programs and other benefit programs.

This morning, Park Place's shares remained at $12.38, unchanged. Analysts say that's not surprising, as Park Place has merely authorized the purchase of the shares, rather than announced a tender offer.

"Certainly the potential for a buyback of this size was one reason we didn't downgrade the stock along with the rest of the (gaming) group," said Robin Farley, gaming analyst with UBS Warburg. Last week, Farley downgraded MGM MIRAGE and Harrah's Entertainment Inc., citing growing concerns that the Las Vegas gaming market was slowing.

"It's sizable in the sense that it represents 8 percent of the company's shares outstanding," Farley said. "It's been authorized ... it doesn't mean they've done it."

The cash for such a big buyback, Farley noted, could be provided by the sale of the Las Vegas Hilton to Los Angeles developer Ed Roski Jr. for $345 million.

Through Oct. 31, Park Place had repurchased 11.8 million shares of its own stock at an average price of $12.12 per share, spending about $143 million. Under a previous repurchase program, Park Place is already authorized to buy back 5 million shares, meaning the company is now authorized to purchase as many as 25 million shares of stock.

As of Aug. 1, Park Place had just over 300 million shares of stock outstanding.

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