Profit climbs for owner of four Atlantic City casinos

Profit climbs for owner of four Atlantic City casinos
Posted by the Asbury Park Press on 11/7/07
BLOOMBERG NEWS SERVICE

Harrah's Entertainment Inc., the casino company that's being acquired for $17.1 billion by buyout firms, said third-quarter profit rose 38 percent after it attracted more gamblers to Las Vegas and its regional U.S. properties.

Net income increased to $244.4 million, or $1.28 a share, from $177.2 million, or 95 cents, a year earlier, the Las Vegas-based company said today in a statement. Revenue rose 13 percent to $2.84 billion, beating the $2.67 billion average estimate by analysts.

Harrah's, the world's largest casino company and owner of the Bally's, Caesars, Harrah's and Showboat casinos in Atlantic City, is being purchased by Apollo Management Group and TPG Inc. for its real- estate holdings and ability to generate cash. The company is expanding its facilities in Indiana and Mississippi to appeal to regional gamblers and building a $1 billion tower at Caesars Palace in Las Vegas for high-rollers.

"The ability to market across segments and different geographical regions is something unique to Harrah's,'' Michael Paladino, a Fitch Ratings analyst in New York, said Nov. 5.Harrah's is trying to secure regulatory approvals to complete its sale by the end of the year. In October, the company said it secured approval from New Jersey and Mississippi gaming regulators.

Should the deal closure take longer, Apollo and TPG will pay investors an additional 2 cents a share above the $90 it bid for every day past March 1, 2008, until the deal is completed.

Harrah's owns 32 casinos in nine states and operates three U.S. tribal casinos and one Canadian property. Overseas, it owns 12 casinos in Egypt, South Africa, the U.K. and Uruguay and is opening locations in the Bahamas, Slovenia and Spain.