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Moves abound in the growing consolidation of the gaming business.
Ed Zwirn, CFO.com | US
September 1, 2004
In a move aimed at smoothing the way for regulatory approval of their upcoming merger, Harrah’s Entertainment and Caesars Entertainment are in talks with a Los Angeles-based real estate investment firm to sell four casinos.
Colony Capital LLC would acquire the Hilton in Atlantic City, New Jersey, and Bally's Casino in Tunica, Mississippi, from Caesars. The firm would also buy casinos in Tunica and East Chicago, Indiana, from Harrah's, according to Bloomberg.
After shedding the four properties to try to win antitrust approval from the U.S. Federal Trade Commission, the combined company would reportedly have 52 casinos.
Announcement of the Harrah’s/Caesars deal, worth about $9.4 billion in cash, stock and assumption of debt, followed closely on the heels of MGM Mirage's $7.9 billion agreement to acquire Mandalay Resort Group. (For more on an industry where the CFOs are "big players," see CFO magazine's September article "Doubling Down.")
Colony Capital is headed by Thomas Barrack, a former money manager for the Bass family of Texas. In June bought the Las Vegas Hilton from Caesars for $280 million and said it will build on land adjacent to the resort, according to press reports. Colony Capital also owns the Resorts casino in Atlantic City.
The merged company would reportedly still own five of the 13 casinos in Atlantic City, four casinos in Tunica, two in East Chicago and several in Las Vegas. The purchase will close in about a year, Harrah's said last month, according to the reports.