Amendments may trim Caesars purchase price by $100 million

Wednesday, Jan. 5, 2000 | 10:12 a.m.

Park Place Entertainment Corp. of Las Vegas may have trimmed much as $100 million from its purchase price for Caesars World Inc., the casino giant said in a filing with the Securities & Exchange Commission.

The original agreement Park Place signed with Starwood Hotels & Resorts Worldwide last spring called for Park Place to pay Starwood $3 billion for Caesars World's assets when the deal closed.

The agreement also called for certain adjustments that could have boosted the final price above $3 billion.

One required Park Place to reimburse Starwood up to $5 million a month for maintenance capital spending on Caesars' hotels and casinos. Another called for Park Place to reimburse Starwood for a net working capital requirement above $25 million.

Both numbers were amended in the closing documents executed last Thursday, the day the transaction was effective. The maintenance capital requirement was eliminated, which saved Park Place about $50 million. The working capital total was raised to $60 million, saving Park Place another $35 million. About $15 million in savings came from miscellaneous amendments, boosting the total to about $100 million.

The final price is expected to be calculated within 45 days after delivery of the closing balance sheet for Caesars World.