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Caesars Entertainment, Inc. Selling the Reno Hilton to Grand Sierra Resort Corp. for Approximately $150 million; 
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Plans to Reconstruct the Hotel to Resemble a Traditional Lake
Tahoe Lodge with With One of the World's
Largest Indoor Water Parks

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LAS VEGAS - May 11, 2005 -- Caesars Entertainment, Inc. (NYSE: CZR) today announced that it has entered into a definitive agreement to sell its Reno Hilton casino resort to Grand Sierra Resort Corp., a Nevada-based hotel and resort developer, for approximately $150 million.

The transaction is expected to close by the end of the fourth quarter of 2005 and is subject to customary regulatory approvals and closing conditions outlined in the purchase agreement.

With nearly 2,000 rooms, ten restaurants, 200,000 square feet of convention space, a world-class dinner theater and 107,000 square feet of gaming space with more than 1,300 slot machines, the Reno Hilton is one of the premier casino resorts in Northern Nevada. Grand Sierra Resort Corp. plans to reconstruct the property to create the quintessential entertainment destination, which will include one of the world's largest indoor water parks. Upon approval of the Nevada Gaming Control Board and the Nevada Gaming Commission, Larry Woolf, former chief executive officer and chairman of MGM Grand Hotel, Las Vegas, will lease the property's gaming operations from Grand Sierra Resort Corp.

"We have some very exciting plans for the Reno Hilton, which I believe is one of the most exceptional properties in Nevada," said Thomas J. Schrade, president of Grand Sierra Resort Corp. "We will disclose further details of those plans as we move forward. Right now, we simply want to say that we are looking forward to working very closely with the people and public officials of Reno to develop an extraordinary resort that will create significant economic benefits for the community."
 

Reno Hilton Redevlopment Plans

The Reno Hilton is the largest hotel complex in northern Nevada, with 1995 rooms, 107,000 sq. ft. casino, over 60,000 sq. ft. of retail space, 10 restaurants, a 50-lane bowling ally, a multiplex cinema, and a family arcade. It also includes an expansive full-production 1,800 seat dinner theater and over 200,000 sq. ft. of convention and meeting spaces. The hotel complex cost approximately $500 million to build in 1980 and has been maintained in pristine condition with substantial renovations over the past ten years. The facility has over 2.6 million square feet, and the replacement cost of the Reno Hilton would approach $1 Billion.1 Grand Sierra will reposition the facility as a family-friendly, world-class tourist destination.

The redevelopment plan includes:

  • Renovation of the hotelís interior and exterior to resemble a traditional Lake Tahoe lodge.
  • Upgrade of the facilityís spa, midway arcade, and retail areas, with the addition of approximately 100,000 square feet of retail space.
  • Conversion of 217 for-sale condominium units on the top six floors of the hotel, with the units being placed into the hotel under a rental management agreement.
  • Outsourcing of its casino operation (the largest in Reno) to Larry Woolf of the Navegante Group. Larry Woolf, former Chairman and CEO of MGM Grand, who has built, managed and consulted with over 60 casinos throughout the world.
  • Construction of a 150,000 square foot indoor waterpark, making the resort the first indoor hotel waterpark in the West Coast and the largest indoor waterpark in the country.

Rendering of the Reconstructed Reno Hilton

Under the terms of the agreement, Grand Sierra Resort Corp. will purchase certain assets of the Reno Hilton and will assume certain related current liabilities. In addition, a subsidiary of the Navegante Group will purchase certain of the gaming assets of the Reno Hilton from Caesars Entertainment and will assume certain gaming-related current liabilities.

Pending regulatory approval, the Navegante Group will operate the casino at the Reno Hilton pursuant to a casino lease agreement with Grand Sierra. The aggregate consideration may be adjusted for changes in net working capital. Oppenheimer & Company is the exclusive financial advisor to Grand Sierra Resort Corp. Caesars Entertainment was represented by CB Richard Ellis on the transaction.

About Grand Sierra Resort Corp.
Grand Sierra Resort Corp., a Nevada-based company, was formed by a group of developers and investors who collectively have more than one hundred years of experience in real estate development, hospitality, and gaming. Grand Sierra Resort identified the Reno Hilton as having the capacity, both in land and structure, to support one of the world's largest indoor water park and entertainment destinations. Grand Sierra plans on redeveloping the property by creating a synergistically themed resort, blending hotel, condominiums, indoor water park, retail stores, restaurants, theme parks and midways elements into an unparalleled guest experience.

About Caesars Entertainment
Caesars Entertainment, Inc. (NYSE: CZR) is one of the world's leading gaming companies. With annual revenue of $4.2 billion, 24 properties on three continents, more than 25,000 hotel rooms, two million square feet of casino space and 50,000 employees, the Caesars portfolio is among the strongest in the industry. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The company has its corporate headquarters in Las Vegas.

The company's Board of Directors in July 2004 accepted an offer from Harrah's Entertainment, Inc. to acquire the company for approximately $1.9 billion in cash and 67.9 million shares of Harrah's common stock. Shareholders of both companies approved the merger in separate meetings on March 11, 2005. The transaction is contingent on approval by federal and state regulatory agencies and is expected to close in the second quarter of 2005.

This document includes "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. 

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Contact:

Grand Sierra Resort Corp.
David Wasick, 775-823-2900
dwasick@beckleylaw.com
www.grandsierraresort.com

Caesars Entertainment
Robert W. Stewart
702-699-5043
stewartr@parkplace.com
www.caesars.com
 

Also See: Faced with Two Years of Declining Visitors and Shrinking Gaming Revenues, Reno Works to Broaden Appeal / Feb 2003
Owners Ally and Amin Visram Renovate and Reopen the Former Flamingo Hilton as the Golden Phoenix Hotel Casino / Dec 2002


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