Caesars shareholders choose stock over cash

Monday, June 13, 2005 | 11:08 a.m.

Harrah's Entertainment Inc. said today that it expects nearly all of Caesars Entertainment Inc. shareholders to elect to receive Harrah's shares instead of cash in the company's buyout of Caesars.

The $9 billion deal, expected to close on or around 1 p.m. today, will create the world's largest gaming company with more than 40 casinos and $17.5 billion in assets.

Harrah's has so far confirmed that about 80 percent of Caesars' 314.8 million shares of stock outstanding as of June 10 have elected to receive Harrah's stock.

Harrah's stock has risen in value since the deal was announced last year, making it more valuable than Harrah's cash offer of $17.75 per share for each share of Caesars stock. If all Caesars shareholders elect to receive stock, they will receive a combination of .2157 of a share of Harrah's for each share of Caesars stock in addition to $5.96 in cash.

Harrah's previously said it would purchase Caesars using $1.9 billion in cash and 67.9 million shares of Harrah's stock.

Harrah's stock rose 15 cents to $71.97 per share in midmorning trading today.

At that price, Caesars shareholders would be getting $21.48 in cash and Harrah's stock per share of Caesars stock, $3.73 more per share than the all-cash offer of $17.75.