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Report: Harrah's Bid Sweetened

The New York Times says the casino operator rejected the initial $81-a-share offer.

The bidding for

Harrah's Entertainment


may be heating up.

The New York Times

reported Wednesday that Apollo Management and Texas Pacific Group have sweetened their bid this week for the casino operator to $83 to $84 per share.

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The article also said that Harrah's board rejected the groups' initial offer of $81 per share, submitted last week.

The proposed deal marks the first major entrance of

private equity into the gaming space.

Most industry watchers were expecting Harrah's to reject the initial offer and push for a higher bid.

Eric Green, portfolio manager with Penn Capital Management, which owns Harrah's, believes the price will still go higher. He expects a final bid of $85 to $95.

"I don't see why they wouldn't do a deal," he says, pointing to the fact that Harrah's let its poison pill expire last week.

Harrah's closed flat Tuesday at $76.39. The stock is trading at a discount to the initial offer price because a buyout would likely take at least a year to be finalized because of lengthy casino regulatory approvals.