Harrah’s Entertainment considering a move into the UK casino market
It is as yet unclear whether the New York listed company will wait until the merger is completed before making a move, but it is known that Harrah’s chief executive Gary Loveman wants to expand the group’s overseas activities due to a drop in share prices due to concerns of ’soaring construction costs in Las Vegas’.
LOS ANGELES (Reuters) - Harrah’s Entertainment, the world’s largest gambling company, declined on Monday to comment on weekend reports that it is interested in acquiring two British casino operators that are in the process of merging.
The London Times reported on Sunday that the Las Vegas-based company was studying a proposal to buy Stanley Leisure Organization, which is in talks to acquire London Clubs International in a deal estimated at $1.2 billion.
"We don’t comment on market rumors," Harrah’s spokesman Alberto Lopez said on Monday.
Bear Stearns analyst Joe Greff, in a research note on Monday, wrote that the acquisition could make sense, at the right price.
"The British market is in the midst of a rapid expansion, and a British presence would serve as a good base for watching over Harrah’s European growth projects, namely in Spain and Slovenia," the analyst wrote.
In addition to those two European sites, Harrah’s, which in May lost out to rival Las Vegas Sands Corp. in a competition to build Singapore’s first casino, is working on a casino project in the Bahamas and plans to redevelop its operations in Las Vegas, Atlantic City and Biloxi, Mississippi.
Greff wrote that at current stock prices, a deal to acquire Stanley Leisure and London Clubs would be roughly neutral to Harrah’s earnings per share, but the deal would dilute earnings per share at higher prices, excluding possible cost savings or revenue gains.
