Thursday, July 15, 2004

Harrah's in talks to buy Caesars

By Adam Goldman
The Associated Press

LAS VEGAS - Harrah's Entertainment Inc. is in talks to buy larger gambling rival Caesars Entertainment Inc., a source familiar with the negotiations said, to leapfrog ahead of the proposed merger of MGM Mirage and Mandalay Resort Group as the biggest gambling company in the world.

The two Las Vegas-based companies could announce an agreement this week, the source said Tuesday.

News of the talks, first reported in The Wall Street Journal, sent Caesars shares up 17 percent Wednesday, while Harrah's stock slipped.

The companies began negotiating after MGM Mirage cemented a deal last month to buy Mandalay Resort Group for $4.8 billion in cash, the source said.

Terms of the possible Harrah's-Caesars deal were not available; Caesars market value stood at about $5 billion Wednesday; the company also has nearly that amount in debt.

Messages left with spokesmen for the companies were not immediately returned.

Harrah's, which is heavily into riverboat casinos, has 26 casinos in 13 states under the Harrah's and Showboat names - and has 41,000 employees. Harrah's also is one of two owners of Turfway Park, the thoroughbred racing facility in Florence.

Caesars, which changed its name in January from Park Place Entertainment Corp., is the largest casino operator in the world, but would be eclipsed by a Mirage-MGM Grand combination.

Caesars has 27 properties in five countries on four continents, including Caesars Indiana across the Ohio River from Louisville. Overall company employment is 54,000. The company led the industry with $4.17 billion in 2003 revenues. Mirage revenues totaled $3.91 billion, while Mandalay reported $2.49 billion. Harrah's had $4.13 billion in revenue last year.

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