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Las Vegas Gaming Companies Say $9.4 Billion
Merger Gets Closer to Completion

By Howard Stutz, Las Vegas Review-Journal
Knight Ridder/Tribune Business News

Jan. 21, 2005 -- Harrah's Entertainment and Caesars Entertainment announced jointly Wednesday that the companies had substantially complied with a request from the Federal Trade Commission for additional information surrounding their proposed $9.4 billion merger agreement.

A spokesman for the federal agency said that if the companies have certified all the additional information requested covering various antitrust concerns, government regulators would have 30 days to approve the transaction, which would create the world's largest casino company.

Harrah's spokesman Gary Thompson said the FTC asked for additional information last fall, a few months after Harrah's announced in July it was purchasing Caesars. At the time, the companies managed a combined 56 casinos throughout the United States.

Since the transaction was announced, Harrah's and Caesars pared some of their holdings where the FTC could have antitrust concerns. In September, the companies said that Colony Capital had agreed to purchase four properties: Harrah's East Chicago, Harrah's Tunica (Miss.), Atlantic City Hilton and Bally's Tunica (Miss.) for $1.2 billion. A month later, Caesars agreed to sell Bally's Casino New Orleans to Columbia Sussex for $24 million. In November, Caesars agreed to sell Caesars Tahoe to Columbia Sussex for $45 million.

All transactions are subject to various approval processes.

Thompson said the FTC had expressed concerns about both companies operating casinos in Atlantic City and Tunica, which were addressed by the proposed sale agreements.

"We've responded fully to what the FTC had requested," he said.

In the statement, the companies said they were in "substantial compliance" with the FTC and certified the documents turned over to the agency.

Susquehanna Financial Group gaming analyst Eric Hausler said the announcement was basically "a paperwork transaction" and was letting the investment community know the companies were still hopeful the merger can be completed by the end of June.

Mitch Katz, a spokesman for the FTC, said the agency couldn't comment specifically on the transaction. However, if the companies had certified their compliance with the request for additional information, the 30-day clock would start ticking for regulators to approve the deal. He said the FTC could hold up the process by requesting additional information.

FTC approval is also still pending for MGM Mirage's $7.9 billion buyout of the Mandalay Resort Group. The companies have said they would like to close the transaction by the end of March.

Also on Wednesday, Harrah's announced that the company's board of directors had declared a quarterly cash dividend of 33 cents per share, payable on Feb. 23 to shareholders of record by the close of business on Feb. 9.

Shares in Harrah's closed down 24 cents, or 0.36 percent, Wednesday at $65.74; shares in Caesars were down 10 cents, or 0.5 percent, at $19.85.

-----To see more of the Las Vegas Review-Journal, or to subscribe to the newspaper, go to http://www.lvrj.com.

(c) 2005, Las Vegas Review-Journal. Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail [email protected]. HET, CZR, MGG,

 
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