Harrah’s and Caesars look to sell 4 casinos
August 31, 2004
Harrah’s Entertainment Inc. and Caesars Entertainment Inc. said Tuesday they have begun negotiations to sell four casinos, in a move expected to reduce antitrust concerns involving their recent merger agreement.
There’s no mention of Stateline casinos.
The talks involve Harrah’s casinos in Tunica, Miss., and East Chicago, Ind., and the Caesars-owned Bally’s casino in Tunica and the Atlantic City Hilton, the companies said. A joint statement identified Los Angeles real estate investment company Colony Capital LLC as a potential buyer.
A letter of agreement between Harrah’s, Caesars and Colony restricts the two Las Vegas-based gambling companies in negotiations with other parties on the sale of the properties, the statement said.
Robert Stewart, spokesman for Caesars Entertainment, declined to say anything about the status of Caesars Tahoe. When the sale was initially announced, Harrah’s Entertainment management said the casino giant may consider selling the Stateline property. Officials have said regulators will evaluate a prospective monopoly there upon closure of the sale.
Stewart expects the sale to go through in 2005.
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Harrah’s Lake Tahoe and Caesars Tahoe management have declined to comment on the matter, leaving the business to their Las Vegas corporations.
Harrah’s and Caesars characterized the negotiations as preliminary, with no assurance an agreement will be reached and no plans for public announcements until an agreement is signed.
Two sources who spoke on the condition of anonymity told The Associated Press on Monday that Colony was not the only company interested in buying the properties. One said Colony had less than 30 days to offer a bid on the four properties.
The Wall Street Journal reported late Monday that the deal was worth about $1.26 billion, citing several people familiar with the deal.
Harrah’s and Caesars spokesmen declined comment Monday.
Last week the Federal Trade Commission asked Harrah’s and Caesars for additional information regarding their merger. Under terms of the deal, Harrah’s will pay $1.8 billion in cash and exchange about $3.4 billion in Harrah’s stock for all shares of its Las Vegas-based rival.
Harrah’s also will assume about $4.2 billion in Caesars debt.
Antitrust experts, along with Standard & Poor’s, have said they expect Harrah’s to sell off casinos in some states.
In Indiana, Harrah’s would own three gambling licenses but regulations permit ownership of only two plus 10 percent of a third, according to Standard & Poor’s.
Harrah’s Entertainment, which operates heavily with riverboat casinos, has 28 casinos in 13 states under the Harrah’s and Showboat names. It has about 41,000 employees.
Caesars has 28 properties worldwide, including Caesars Palace and Bally’s Las Vegas, and employs 54,000.
Caesars recently completed the sale of the Las Vegas Hilton to an affiliate of Colony Capital for about $280 million.
On the Net:
Caesars Entertainment: http://www.caesars.com
Colony Capital LLC: http://www.colonyinc.com
Harrah’s Entertainment: http://www.harrahs.com
– Tribune staff writer Susan Wood contributed to this report.