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September 30, 2014

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Harrah’s moves ahead with possible Planet Hollywood acquisition

Harrah’s Entertainment has filed an application with state gaming regulators to acquire Planet Hollywood Resort and Casino, the Nevada Gaming Control Board said today.

A spokesperson for the Gaming Control Board said the application was filed on Wednesday. The application will be assigned for investigation and will be heard before the Gaming Control Board, followed by the Gaming Commission after the investigation is complete some time next year, a spokesperson said.

A spokesperson from Planet Hollywood could not immediately be reached for comment.

Harrah's Entertainment Inc.'s chief executive officer confirmed to employees that the company is interested in acquiring the Planet Hollywood resort on the Las Vegas Strip.

In an internal e-mail, CEO Gary Loveman told employees of the company's interest, Harrah's spokeswoman Jacqueline Peterson said.

"The Planet Hollywood resort sits adjacent to the Paris Las Vegas Hotel & Casino, currently the southernmost of six contiguous Harrah's-owned properties on the east side of the Las Vegas Strip," Loveman's e-mail said.

"The Planet Hollywood resort is currently in default to its lenders. As a result of our purchase of their debt, we are working on a plan that also would allow Harrah's to own and manage the property. This is an attractive proposition because of Planet Hollywood's proximity to our other resorts on the Strip, its high-quality product offering and its strong brand name.''

"This move is the latest example of our strategy to make purchases or acquisitions capitalizing on opportunities created by current economic conditions. I look forward to sharing more details with you about this project in the future,'' the e-mail said.

Harrah's, according to the Wall Street Journal, had already purchased some $140 million of the debt of Planet Hollywood through mid-September.

The 2,518-room Planet Hollywood on Nov. 16 reported a $17.5 million quarterly loss and disclosed that lenders had taken control of its finances after it defaulted on debt obligations that total $870 million.

The hotel-casino is across the street from CityCenter and, like other properties on the Strip, has suffered from the decline in travel to Las Vegas.

Planet Hollywood is owned and operated by Planet Hollywood International Inc., which is controlled by founder and Chief Executive Robert Earl. Earl, along with joint venture partners Bay Harbour Management LC and Starwood Hotels and Resorts Worldwide purchased the Aladdin Resort in June 2003 and revamped it to become Planet Hollywood.

The resort is scheduled to open its Westgate Towers in December. The non-gaming, 52-story residential tower will include 1,200 suites and 28 penthouses.

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