12/21/2006

from today's STR News Clippings of top hospitality news:


Harrah's Board Agrees to a $17.1 billion, or $90 per share, Buyout from
Loveman "This Will be a Change in Ownership, Not a Change in Direction"

"LAS VEGAS - Harrah's Entertainment, Inc. (NYSE: HET) today announced it has entered into a definitive agreement for affiliates of Texas Pacific Group (TPG) and Apollo Management, L.P. to acquire Harrah’s in an all-cash transaction valued at approximately $27.8 billion, including the assumption of approximately $10.7 billion of debt.
Under the terms of the agreement, Harrah’s stockholders will receive $90.00 in cash for each outstanding Harrah’s share. This represents a premium of approximately 36% over Harrah’s closing share price on September 29, 2006, the last trading day before disclosure of the initial offer made by Apollo and TPG to acquire Harrah’s for $81.00 per share.
The Harrah’s Board of Directors, based on the recommendation of a Special Committee of non-management directors which conducted a thorough review of Harrah’s strategic alternatives, has approved the agreement and has recommended that Harrah’s stockholders vote in favor of the agreement.
.........
Under the merger agreement, Harrah's may solicit superior proposals from third parties during the next 25 days. The board of directors of Harrah's, through its special committee and with assistance of its independent advisors, intends to solicit superior proposals during this period. There can be no assurances that the solicitation of superior proposals will result in an alternative transaction. Harrah's does not intend to disclose developments with respect to this solicitation process unless and until its board of directors has made a decision.
The transaction is expected to be completed in approximately one year, and is subject to stockholder approval, regulatory approvals, and customary closing conditions. It is not subject to a financing condition.
Harrah’s intends to pay stockholders its regular quarterly dividend of $0.40 per share until the transaction closes. Apollo and TPG have agreed to increase the purchase price at a rate of $0.01973 per day per Harrah’s common share beginning March 1, 2008, if closing has not occurred by that date, less an adjustment for any dividends paid on or after March 1, 2008. ......"
For the complete story go to: http://www.smithtravelresearch.com/smithtravelresearch/news/findnewsarticle.aspx?article=25242