MEMPHIS, TN Harrah s Entertainment Inc. has agreed to purchase the assets of Harvey s Casino Resorts from Colony Capital Investors III LP for an aggregate consideration of $625 million, (broken down as $275 million in cash plus $350 million of assumed debt). Market analysts at Moody s Investors Service expect Harrahs to finance the transaction with an increase to their existing bank facilities or public debt offerings.
According to sources at Morgan Stanley Dean Witter, Harrah s is slated to further assume some $50 million of contingent liabilities that are off-balance sheet, and plans to spend $50 million in capital expenditures related to the Harvey s assets. The transaction is expected to close in the third quarter of 2001.
The Harvey s purchase will be Harrah s fourth major acquisition in recent years, following the firm s acquisition of Showboat in June of 1998, Rio in January of 1999, and Players last June. This most recent acquisition reportedly stands to increase Harrah s geographic distribution, provide it with a presence in two new markets, and broaden its access to customers.
Harrah s is an owner, operator, and developer of casinos, currently listing 21 such sites in a number of U.S. markets under a variety of brand names. (4/25/01) MichaelBillig