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Harrah's buying Caesars
The $5.2B cash and stock deal would create the world's largest casino operator.
July 15, 2004: 10:16 AM EDT

NEW YORK (CNN/Money) - Harrah's Entertainment Inc. said it has agreed to buy rival Caesars Entertainment Inc. Thursday for about $5.2 billion in cash and stock, creating the world's largest casino operator.

Based on Caesar's Wednesday's close of $16.96 a share, the deal represents a premium of roughly 6 percent. Harrah's shares fell $1 to $50.98 Wednesday on the New York Stock Exchange.

Under terms of the agreement, Caesars shareholders will receive an aggregate of $1.8 billion in cash and 66.3 million shares of Harrah's Entertainment common stock.

The deal also includes the assumption of about $4.2 billion of Caesar's debt.

The agreement would also allow a certain number of Caesars' current directors to join the Harrah's Entertainment board.

Las Vegas-based Caesars (CZR: Research, Estimates) operates 28 casinos and approximately 26,000 hotel rooms, with properties in Las Vegas, Atlantic City, and Mississippi while Harrah's operates 28 casinos and approximately 15,650 hotel rooms.

The transaction, which represents a multiple of approximately 8 times analysts' estimates of Caesars' 2005 earnings before interest, taxes, depreciation and amortization (EBITDA), is expected to close in a year subject to approval from regulators and shareholders of both companies.

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"This acquisition will solidify Harrah's position as the pre-eminent distributor of casino entertainment," Gary Loveman, Harrah's chief executive officer, said in a statement. "We estimate we can realize approximately $80 million of synergies in the first full year of the acquisition, with significantly more expected over time."  Top of page


-- from staff and wire reports




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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.