Harrah's Takes Caesars
Updated from 10:04 a.m. EDT
Under terms of the transaction, Caesars will receive $1.8 billion in cash and 66.3 million shares of Harrah's Entertainment common stock. The price tag also includes 4.2 billion in debt. A certain number of Caesars' current directors will join Harrah's board.
Based on the closing price of Harrah's shares on July 14, 2004, the transaction values Caesars common shares at $16.96.Caesars shares fell 94 cents, or 5.9%, to $15.06 while Harrah's shed $3.14, or 6.2%, to $47.84. With Caesars shares tacking on 15% yesterday, analysts say the stock doesn't have much upside left and moved to downgrade the company. Both Fulcrum Global Partners and Prudential Equity Group cut their ratings on the company, saying it was fully valued at the present time. (Fulcrum does and seeks to do business with the companies covered in its research report -- Prudential does not have an investment banking business.) The deal comes just one month after MGM Mirage (MGG) bought Mandalay Resorts Group (MBG) for
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