Harrah's Entertainment To Acquire Harveys Casino Resorts From Colony Capital Investors III, L.P, For $625 Million

Apr 24, 2001, 01:00 ET from Harrah's Entertainment, Inc.

    LAS VEGAS, April 24 /PRNewswire Interactive News Release/ -- Harrah's
 Entertainment, Inc. (NYSE:   HET), the leading consumer-marketing company in the
 gaming industry, announced today it has agreed to acquire Harveys Casino
 Resorts from Colony Capital Investors III, L.P., for a total price of
 $625 million, inclusive of the existing debt.  Harrah's also will assume a
 $50 million off-balance-sheet obligation of Harveys.
     The acquisition is subject to customary regulatory approvals and is
 expected to close during the third quarter or as soon as practical once
 approvals have been obtained.  The transaction has been approved by the Board
 of Directors of Harrah's Entertainment and by Colony Capital.
     As part of the purchase agreement, Harrah's Entertainment will acquire
 Harveys Resort & Casino in Lake Tahoe, Nev.; the Harveys Casino Hotel and the
 Bluffs Run Casino, both in Council Bluffs, Iowa, and Harveys Wagon Wheel
 Hotel/Casino in Central City, Colo.  Harrah's will not acquire Colony
 Capital's agreement to purchase the Resorts Casino Hotel in Atlantic City.
     "We are extremely pleased with the agreement to acquire Harveys," said
 Phil Satre, Harrah's Entertainment Chairman and Chief Executive Officer.
     "We believe the synergies between Harrah's and Harveys are very similar to
 those we have already achieved from the acquisition of Players International,
 Inc., which was completed in March 2000," Satre said.  "The Harveys properties
 are an excellent complement to our existing geographic network of casino
 locations and will allow us to further expand the revenue and earnings
 capabilities of our industry-leading customer-loyalty program, Total Rewards."
     For the 12 months ended Feb. 28, 2001, Harveys reported Earnings Before
 Interest, Taxes, Depreciation and Amortization (EBITDA) from continuing
 operations of approximately $110 million.  The purchase price, therefore,
 represents approximately 5.7 times EBITDA for the 12 months ended Feb. 28.
     "We expect to add approximately $25 million to Harveys annual EBITDA
 within 18 months of completing the acquisition," Satre said.  "This is
 expected to be realized by elimination of redundant corporate overhead,
 reduced operating costs resulting from the consolidation of property
 administrative functions, and the implementation of Total Rewards in Lake
 Tahoe and the two Council Bluffs operations.
     "The consolidation of the Harrah's and Harveys operations in Lake Tahoe
 will allow us to improve performance and reduce operating costs by combining
 many aspects of what are today two separate facilities," Satre said.  "We
 expect this combination to assist both properties in dealing with the
 expansion of Indian gaming in Northern California and to provide customers
 with a higher-quality gaming-entertainment experience by combining the best
 aspects of both facilities.
     "Lake Tahoe is one of the country's most spectacular resort destinations,
 and one of the most alluring for casino customers worldwide," he said.  "By
 consolidating two of Northern Nevada's finest facilities, we will be able to
 offer a broader array of amenities at a compelling value that will enhance
 their ability to attract customers who visit other Nevada casinos and
 California Indian gaming locations.  In addition, we expect Harveys customers
 will recognize the benefits of consolidating their play under the Total
 Rewards program, voted the best slot club in every market where it is
 offered."
     The acquisition of the two Council Bluffs properties will enable Harrah's
 to introduce its unique brand of casino entertainment to customers from the
 western Iowa and eastern Nebraska markets, which generated approximately
 $350 million of gaming revenue last year.
     "The two Harveys facilities in Council Bluffs have a combined database of
 more than 600,000 customers, virtually all of whom will be new to Harrah's,"
 Satre said.  "We plan to convert the Harveys Casino Hotel there to the
 Harrah's brand within 12 months of completing the acquisition, and maintain
 the Bluffs Run Casino operation as a separate branded facility that will have
 the technology and loyalty-building tools common to all Harrah's-operated
 properties.
     "The addition of Harveys Council Bluffs players to our database of more
 than 20 million customers should strengthen cross-market play across the
 entire Harrah's network and give Council Bluffs customers access to the
 benefits of Total Rewards," Satre said.  "Total Rewards' robust
 relationship-building tools should provide Council Bluffs management with the
 ability to generate customer loyalty in the same fashion as in other markets
 where we've converted assets to the Harrah's brand."
     Harrah's expects to make no change in the operation of Harveys Wagon Wheel
 Casino Hotel in Central City, Colo.
     Harrah's expects to finance the acquisition, including refinancing of
 Harveys existing debt, through issuance of public debt or bank-credit
 facilities.  Harveys had about $367 million of debt outstanding as of Feb. 28,
 2001, including $150 million of 10 5/8 percent Senior Subordinated Notes due
 2006.  Those Notes are callable after June 1, 2001, at a premium.
     Earlier this year, Harrah's refinanced a portion of its existing debt by
 issuing $500 million of 10-year, 8 percent Senior Notes.  These Notes received
 investment-grade ratings from Moody's Investors Service and Standard & Poor's.
 Harrah's expects to maintain its investment-grade credit ratings following the
 acquisition of Harveys.
     Harrah's is being advised in this transaction by Deutsche Banc Alex.
 Brown.  CIBC World Markets also advised Harrah's.
 
     Harrah's Entertainment will host a conference call for interested parties
 on Tuesday, April 24, 2001, at 5:15 p.m. Eastern Daylight Time to discuss the
 Harveys transaction.  Those interested in participating in the call may dial
 1-888-413-5785, or 1-703-871-3796 for international callers, approximately
 10 minutes before the call start time.  A taped replay of the conference call
 can be accessed at 1-888-266-2081, or 1-703-925-2533 for international
 callers, beginning at 9:15 p.m. EDT April 24.  The replay will be available
 through midnight EDT on Wednesday, May 1.  The passcode for the replay is
 5184801.
     Interested parties wanting to listen to the live conference call on the
 Internet may do so on the company's web site -- www.harrahs.com -- in the
 Investor Relations section behind the "About Us" tab.
 
     Founded more than 60 years ago, Harrah's Entertainment, Inc. is the most
 recognized and respected name in the casino-entertainment industry, operating
 21 casinos in the United States under the Harrah's, Showboat, Rio and Players
 brand names.  With a combined database of more than 20 million players,
 Harrah's Entertainment is focused on building loyalty and value with its
 target customers through a unique combination of great service, excellent
 products, unsurpassed distribution, operational excellence and technology
 leadership.
 
     This release includes "forward-looking statements" intended to qualify for
 the safe harbor from liability established by the Private Securities
 Litigation Reform Act of 1995.  These forward-looking statements generally can
 be identified by phrases such as the company "believes," "expects,"
 "anticipates," "foresees," "forecasts," "estimates" or other words or phrases
 of similar import.  Similarly, such statements herein that describe the
 company's business strategy, outlook, objectives, plans, intentions or goals
 are also forward-looking statements.  All such forward-looking statements are
 subject to certain risks and uncertainties that could cause actual results to
 differ materially from those in forward-looking statements.  Such risks and
 uncertainties include, but are not limited to, economic, bank, equity and
 debt-market conditions, changes in laws or regulations, third-party relations
 and approvals, decisions of courts, regulators and governmental bodies,
 factors affecting leverage, including interest rates, abnormal gaming holds,
 and effects of competition.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X85456086
 
 

SOURCE Harrah's Entertainment, Inc.
    LAS VEGAS, April 24 /PRNewswire Interactive News Release/ -- Harrah's
 Entertainment, Inc. (NYSE:   HET), the leading consumer-marketing company in the
 gaming industry, announced today it has agreed to acquire Harveys Casino
 Resorts from Colony Capital Investors III, L.P., for a total price of
 $625 million, inclusive of the existing debt.  Harrah's also will assume a
 $50 million off-balance-sheet obligation of Harveys.
     The acquisition is subject to customary regulatory approvals and is
 expected to close during the third quarter or as soon as practical once
 approvals have been obtained.  The transaction has been approved by the Board
 of Directors of Harrah's Entertainment and by Colony Capital.
     As part of the purchase agreement, Harrah's Entertainment will acquire
 Harveys Resort & Casino in Lake Tahoe, Nev.; the Harveys Casino Hotel and the
 Bluffs Run Casino, both in Council Bluffs, Iowa, and Harveys Wagon Wheel
 Hotel/Casino in Central City, Colo.  Harrah's will not acquire Colony
 Capital's agreement to purchase the Resorts Casino Hotel in Atlantic City.
     "We are extremely pleased with the agreement to acquire Harveys," said
 Phil Satre, Harrah's Entertainment Chairman and Chief Executive Officer.
     "We believe the synergies between Harrah's and Harveys are very similar to
 those we have already achieved from the acquisition of Players International,
 Inc., which was completed in March 2000," Satre said.  "The Harveys properties
 are an excellent complement to our existing geographic network of casino
 locations and will allow us to further expand the revenue and earnings
 capabilities of our industry-leading customer-loyalty program, Total Rewards."
     For the 12 months ended Feb. 28, 2001, Harveys reported Earnings Before
 Interest, Taxes, Depreciation and Amortization (EBITDA) from continuing
 operations of approximately $110 million.  The purchase price, therefore,
 represents approximately 5.7 times EBITDA for the 12 months ended Feb. 28.
     "We expect to add approximately $25 million to Harveys annual EBITDA
 within 18 months of completing the acquisition," Satre said.  "This is
 expected to be realized by elimination of redundant corporate overhead,
 reduced operating costs resulting from the consolidation of property
 administrative functions, and the implementation of Total Rewards in Lake
 Tahoe and the two Council Bluffs operations.
     "The consolidation of the Harrah's and Harveys operations in Lake Tahoe
 will allow us to improve performance and reduce operating costs by combining
 many aspects of what are today two separate facilities," Satre said.  "We
 expect this combination to assist both properties in dealing with the
 expansion of Indian gaming in Northern California and to provide customers
 with a higher-quality gaming-entertainment experience by combining the best
 aspects of both facilities.
     "Lake Tahoe is one of the country's most spectacular resort destinations,
 and one of the most alluring for casino customers worldwide," he said.  "By
 consolidating two of Northern Nevada's finest facilities, we will be able to
 offer a broader array of amenities at a compelling value that will enhance
 their ability to attract customers who visit other Nevada casinos and
 California Indian gaming locations.  In addition, we expect Harveys customers
 will recognize the benefits of consolidating their play under the Total
 Rewards program, voted the best slot club in every market where it is
 offered."
     The acquisition of the two Council Bluffs properties will enable Harrah's
 to introduce its unique brand of casino entertainment to customers from the
 western Iowa and eastern Nebraska markets, which generated approximately
 $350 million of gaming revenue last year.
     "The two Harveys facilities in Council Bluffs have a combined database of
 more than 600,000 customers, virtually all of whom will be new to Harrah's,"
 Satre said.  "We plan to convert the Harveys Casino Hotel there to the
 Harrah's brand within 12 months of completing the acquisition, and maintain
 the Bluffs Run Casino operation as a separate branded facility that will have
 the technology and loyalty-building tools common to all Harrah's-operated
 properties.
     "The addition of Harveys Council Bluffs players to our database of more
 than 20 million customers should strengthen cross-market play across the
 entire Harrah's network and give Council Bluffs customers access to the
 benefits of Total Rewards," Satre said.  "Total Rewards' robust
 relationship-building tools should provide Council Bluffs management with the
 ability to generate customer loyalty in the same fashion as in other markets
 where we've converted assets to the Harrah's brand."
     Harrah's expects to make no change in the operation of Harveys Wagon Wheel
 Casino Hotel in Central City, Colo.
     Harrah's expects to finance the acquisition, including refinancing of
 Harveys existing debt, through issuance of public debt or bank-credit
 facilities.  Harveys had about $367 million of debt outstanding as of Feb. 28,
 2001, including $150 million of 10 5/8 percent Senior Subordinated Notes due
 2006.  Those Notes are callable after June 1, 2001, at a premium.
     Earlier this year, Harrah's refinanced a portion of its existing debt by
 issuing $500 million of 10-year, 8 percent Senior Notes.  These Notes received
 investment-grade ratings from Moody's Investors Service and Standard & Poor's.
 Harrah's expects to maintain its investment-grade credit ratings following the
 acquisition of Harveys.
     Harrah's is being advised in this transaction by Deutsche Banc Alex.
 Brown.  CIBC World Markets also advised Harrah's.
 
     Harrah's Entertainment will host a conference call for interested parties
 on Tuesday, April 24, 2001, at 5:15 p.m. Eastern Daylight Time to discuss the
 Harveys transaction.  Those interested in participating in the call may dial
 1-888-413-5785, or 1-703-871-3796 for international callers, approximately
 10 minutes before the call start time.  A taped replay of the conference call
 can be accessed at 1-888-266-2081, or 1-703-925-2533 for international
 callers, beginning at 9:15 p.m. EDT April 24.  The replay will be available
 through midnight EDT on Wednesday, May 1.  The passcode for the replay is
 5184801.
     Interested parties wanting to listen to the live conference call on the
 Internet may do so on the company's web site -- www.harrahs.com -- in the
 Investor Relations section behind the "About Us" tab.
 
     Founded more than 60 years ago, Harrah's Entertainment, Inc. is the most
 recognized and respected name in the casino-entertainment industry, operating
 21 casinos in the United States under the Harrah's, Showboat, Rio and Players
 brand names.  With a combined database of more than 20 million players,
 Harrah's Entertainment is focused on building loyalty and value with its
 target customers through a unique combination of great service, excellent
 products, unsurpassed distribution, operational excellence and technology
 leadership.
 
     This release includes "forward-looking statements" intended to qualify for
 the safe harbor from liability established by the Private Securities
 Litigation Reform Act of 1995.  These forward-looking statements generally can
 be identified by phrases such as the company "believes," "expects,"
 "anticipates," "foresees," "forecasts," "estimates" or other words or phrases
 of similar import.  Similarly, such statements herein that describe the
 company's business strategy, outlook, objectives, plans, intentions or goals
 are also forward-looking statements.  All such forward-looking statements are
 subject to certain risks and uncertainties that could cause actual results to
 differ materially from those in forward-looking statements.  Such risks and
 uncertainties include, but are not limited to, economic, bank, equity and
 debt-market conditions, changes in laws or regulations, third-party relations
 and approvals, decisions of courts, regulators and governmental bodies,
 factors affecting leverage, including interest rates, abnormal gaming holds,
 and effects of competition.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X85456086
 
 SOURCE  Harrah's Entertainment, Inc.

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