Vol. 4, No. 11, November 2007
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Jersey OKs Harrah’s Buy
Harrah’s Entertainment cleared a major hurdle last month when the New Jersey Casino Control Commission approved the purchase of the company by the Texas Pacific Group and Apollo Management, two private equity firms. The $31 billion deal is dependent upon approval by regulators in all jurisdictions in which Harrah’s operates (50 properties in more than a dozen states), but New Jersey is one of its most important since the four Atlantic City properties generate fully one-third of the company’s revenues.
The company has continued its expansion in Atlantic City—a new tower under construction at Harrah’s and an upcoming announcement about the repositioning of Bally’s. There were some doubts when the deal was announced but most of them have disappeared in the intervening months. Harrah’s pledges that its management team will remain in place and its business plans remain unchanged. The company has announced several major projects in Las Vegas, Mississippi and elsewhere since the buy was announced.
“We invested in Harrah's because we have a tremendous amount of confidence in (chairman and CEO) Gary Loveman,” said Eric Press, a partner in Apollo. “His plans for the business are our plans. We don't intend to change a thing.
“Harrah's has pursued a strategy of growing its assets and investing in its assets,” Press said. “We see no reason why that would change in Atlantic City.”
One day later, the Mississippi Gaming Commission gave its OK for the buyout to proceed.
The buyout still needs approval in nine more states. Texas Pacific and Apollo both said they plan to hang onto Harrah’s for at least five to 10 years.
