LAS VEGAS, Dec. 21 /PRNewswire-FirstCall/ -- Harrah's Entertainment,
Inc., (NYSE: HET) ("Harrah's Entertainment"), announced today that Harrah's
Operating Company, Inc. ("Harrah's Operating"), a subsidiary of Harrah's
Entertainment, is commencing cash tender offers and consent solicitations
for five series of outstanding debt securities, and Harrah's Operating and
Harrah's Entertainment are commencing a cash tender offer and consent
solicitation for one series of outstanding convertible debt securities.
These tender offers and consent solicitations are being conducted in
connection with the previously announced agreement of Harrah's
Entertainment to be merged with an affiliate of Apollo Global Management,
LLC and TPG Capital, LP (the "Merger"). Completion of the tender offers and
consent solicitations is not a condition to completion of the Merger.
However, each tender offer and consent solicitation is itself subject to
the satisfaction of certain conditions, including the satisfaction of the
conditions precedent to the Merger as set forth in the agreement and plan
of merger dated as of December 19, 2006 by and among Harrah's
Entertainment, Hamlet Holdings LLC and Hamlet Merger Inc., and the receipt
of consents of the noteholders representing a majority of the outstanding
principal amount of each series of the securities. The consent solicitation
with respect to each series of securities is not conditioned upon receipt
by the Company of the requisite consent for any other series of securities.
(Logo: http://www.newscom.com/cgi-bin/prnh/20070718/HARRAHSLOGO)
If Harrah's Operating and, in the case of the convertible debt
securities, Harrah's Entertainment, make a material change in the terms of
any offer or consent solicitation or the information concerning any offer
or consent solicitation, they will then disseminate additional offering
materials and extend such offer or, if applicable, consent solicitation, to
the extent required by law.
Debt Securities
The tender offers and consent solicitations with respect to the
$250,000,000 principal amount outstanding of Senior Floating Rate Notes due
2008 (CUSIP No. 413627AR1) (the "Floating Rate Notes") and the other notes
set forth in the table below (together with the Floating Rate Notes, the
"Debt Securities") will expire at 8:00 a.m., New York City time, on January
23, 2008, unless extended or earlier terminated by Harrah's Operating (the
"Expiration Date"). In order to be eligible to receive the total
consideration, which includes the consent payment, as set forth below,
holders must validly tender, and not validly withdraw, their Debt
Securities prior to 5:00 p.m., New York City time on January 7, 2008,
unless extended or earlier terminated by Harrah's Operating (the "Consent
Payment Deadline"). Holders tendering their Debt Securities after the
applicable Consent Payment Deadline but prior to the applicable Expiration
Date will be eligible to receive an amount equal to the tender offer
consideration, which is the total consideration less the consent payment,
as set forth below. Debt Securities purchased in the tender offers will be
paid for on the applicable payment date for each tender offer, which,
assuming the tender offers are not extended, is expected to be promptly
after the applicable Expiration Date. Payment for Debt Securities validly
tendered and accepted will include accrued and unpaid interest to, but not
including, the applicable payment date.
Tenders of debt securities prior to the Consent Payment Deadline may be
validly withdrawn and consents may be validly revoked at any time prior to
the Consent Payment Deadline, but not thereafter. Accordingly, tenders of
Debt Securities and the related consents delivered after the Consent
Payment Deadline will be irrevocable.
The tender offer consideration for the Floating Rate Notes (CUSIP No.
413627AR1; ISIN No. US413627AR15) is $970, and the total consideration for
the Floating Rate Notes is $1,000, in each case for each $1,000 principal
amount of Floating Rate Notes tendered and accepted for purchase, pursuant
to the tender offers. The consent payment included in the total
consideration for the Floating Rate Notes is $30.00 for each $1,000
principal amount of the Floating Rate Notes validly tendered and not
validly withdrawn prior to the Consent Payment Deadline.
The total consideration for each $1,000 principal amount of the
remaining series of Debt Securities validly tendered and not validly
withdrawn pursuant to the tender offers is the price (calculated as
described in the Debt Securities Offer to Purchase referred to below) equal
to (i) the sum of (a) the present value, determined in accordance with
standard market practice, on the payment date for purchased Debt Securities
of $1,000 on the applicable maturity date for the Debt Securities plus (b)
the present value on the scheduled payment date for purchased Debt
Securities of the interest that would be payable on, or accrue from, the
last interest payment date prior to such scheduled payment date until the
applicable maturity date for the Notes, in each case determined on the
basis of a yield to such maturity date equal to the sum of (A) the yield to
maturity on the applicable U.S. Treasury Security specified in the table
below, as calculated by Citi, as lead dealer manager, in accordance with
standard market practice, based on the bid-side price of such reference
security as of 2:00 p.m., New York City time, on January 8, 2008, unless
modified by Harrah's Operating in its sole discretion, as displayed on the
page of the Bloomberg Government Pricing Monitor specified in the table
below or any recognized quotation source selected by Citi in its sole
discretion if the Bloomberg Government Pricing Monitor is not available or
is manifestly erroneous plus (B) the Applicable Spread (as shown in the
table below), minus (ii) accrued and unpaid interest to, but not including,
the scheduled payment date.
The following table summarizes the material terms for the tender offers
for the remaining series of Debt Securities:
CUSIP and Principal Amount Security Description Maturity Date
ISIN Nos. Outstanding
700690AJ9 $400,000,000 8.875% Senior September 15, 2008
US700690AJ90 Subordinated Notes
due 2008
413627AE0 $136,294,000 7.5% Senior Notes January 15, 2009
US413627AE02 due 2009
700690AN0 $425,000,000 7.5% Senior Notes September 1, 2009
US700690AN03 due 2009
700690AS9 $300,000,000 7% Senior Notes April 15, 2013
US700690AS99 due 2013
Consent
Payment per
$1,000
Applicable Reference Relevant Principal
Spread Security Bloomberg Page Amount
50 bps 3.125% UST PX3 $30.00
due 9/15/08
50 bps 3.250% UST PX4 $30.00
due 1/15/09
50 bps 4.000% UST PX4 $30.00
due 6/31/09
50 bps 3.375% UST PX1 $30.00
due 11/30/12
Holders tendering their Debt Securities will be required to consent to
the proposed amendments to the indentures governing the Debt Securities,
which would eliminate or make less restrictive substantially all of the
restrictive covenants, as well as certain events of default and related
provisions, in the indentures. The tender offers and consent solicitations
are being made pursuant to the terms and conditions set forth in the Offer
to Purchase and Consent Solicitation Statement dated December 21, 2007 for
the Debt Securities and the related Letter of Transmittal and Consent (the
"Debt Securities Offer to Purchase").
Convertible Debt Securities
Concurrent with the tender offers and consent solicitations for the
Debt Securities, Harrah's Operating and Harrah's Entertainment are
separately commencing a cash tender offer and consent solicitation with
respect to the $375,000,000 principal amount outstanding of Floating Rate
Contingent Convertible Senior Notes due 2024 of Harrah's Operating (CUSIP
No. 127687AA9; CUSIP No. 127687AB7; ISIN No. US127687AA90; ISIN No.
US127687AB73) (the "Convertible Debt Securities").
The tender offer and consent solicitation with respect to the
Convertible Debt Securities will expire at 8:00 a.m., New York City time,
on January 23, 2008, unless extended or earlier terminated by Harrah's
Operating and Harrah's Entertainment.
The consideration for each $1,000 principal amount of Convertible Debt
Securities validly tendered and not validly withdrawn pursuant to the
tender offer and consent solicitation is $1,379.52, plus accrued and unpaid
interest to, but not including, the payment date, which is expected to be
promptly after the expiration date.
Holders tendering their Convertible Debt Securities will be required to
consent to the proposed amendments to the indenture governing the
Convertible Debt Securities, which would eliminate or make less restrictive
substantially all of the restrictive covenants, as well as certain events
of default and related provisions, in the indenture. The tender offer and
consent solicitation is being made pursuant to the terms and conditions set
forth in the Offer to Purchase and Consent Solicitation Statement dated
December 21, 2007 for the Convertible Securities and the related Letter of
Transmittal and Consent.
Harrah's Operating and Harrah's Entertainment have retained Citi to act
as lead dealer manager in connection with the tender offers and consent
solicitations. Questions about the tender offers and consent solicitations
may be directed to Citi at (800) 558-3745 (toll free) or (212) 723-6106
(collect). Copies of the Offer Documents and other related documents may be
obtained from Global Bondholder Services Corporation, the information agent
for the tender offers and consent solicitations, at (866) 924-2200 (toll
free) or (212) 430- 3774 (for banks and brokers only).
The tender offers and consent solicitations are being made solely
pursuant to the applicable Offer to Purchase and Consent Solicitation
Statement and the related Letter of Transmittal and Consent, which set
forth the complete terms of the tender offers and consent solicitations.
Holders of the Convertible Securities should also read the Schedule TO that
Harrah's Entertainment and Harrah's Operating filed today with the U.S.
Securities and Exchange Commission (the "SEC"). Under no circumstances
shall this press release constitute an offer to purchase or the
solicitation of an offer to sell the Debt Securities or Convertible Debt
Securities or any other securities of Harrah's Operating or Harrah's
Entertainment. It also is not a solicitation of consents to the proposed
amendments to the indentures. No recommendation is made as to whether
holders of the securities should tender their securities or give their
consent.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any security and shall not constitute an
offer, solicitation or sale of any securities in any jurisdiction in which
such offering, solicitation or sale would be unlawful.
About Harrah's Entertainment
Harrah's Entertainment is the world's largest provider of branded
casino entertainment. Since its beginning in Reno, Nevada nearly 70 years
ago, Harrah's Entertainment has grown through development of new
properties, expansions and acquisitions, and now owns or manages casinos on
four continents. Its properties operate primarily under the Harrah's(R),
Caesars(R) and Horseshoe(R) brand names; it also owns the London Clubs
International family of casinos. Harrah's Entertainment is focused on
building loyalty and value with its customers through an unique combination
of great service, excellent products, unsurpassed distribution, operational
excellence and technology leadership.
More information about Harrah's Entertainment is available at its Web
site -- http://www.harrahs.com.
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. You can identify these statements by the
fact that they do not relate strictly to historical or current facts. These
statements contain words such as "may," "will," "project," "might,"
"expect," "believe," "anticipate," "intend," "could," "would," "estimate,"
"continue" or "pursue," or the negative or other variations thereof or
comparable terminology. In particular, they include statements relating to,
among other things, future actions, new projects, strategies, future
performance, the outcomes of contingencies and future financial results of
Harrah's Entertainment and Harrah's Operating. These forward-looking
statements are based on current expectations and projections about future
events.
Investors are cautioned that forward-looking statements are not
guarantees of future performance or results and involve risks and
uncertainties that cannot be predicted or quantified and, consequently, the
actual performance of Harrah's Entertainment and Harrah's Operating may
differ materially from those expressed or implied by such forward-looking
statements. Such risks and uncertainties include, but are not limited to,
the following factors, as well as other factors described from time to time
in our reports filed by Harrah's Entertainment with the SEC (including the
sections entitled "Risk Factors" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations" contained therein): the
occurrence of any event, change or other circumstances that could give rise
to the termination of the merger agreement with TPG and Apollo; the outcome
of any legal proceedings that have been, or will be, instituted against the
Company related to the merger agreement; the inability to complete the
merger due to the failure to satisfy conditions to completion of the
Merger, including the receipt of all regulatory approvals related to the
Merger; the failure to obtain the necessary financing arrangements set
forth in the debt and equity commitment letters delivered pursuant to the
merger agreement; risks that the proposed transaction disrupts current
plans and operations and the potential difficulties in employee retention
as a result of the Merger; the impact of the substantial indebtedness to be
incurred to finance the consummation of the Merger; the effects of local
and national economic, credit and capital market conditions on the economy
in general, and on the gaming and hotel industries in particular;
construction factors, including delays, increased costs for labor and
materials, availability of labor and materials, zoning issues,
environmental restrictions, soil and water conditions, weather and other
hazards, site access matters and building permit issues; the effects of
environmental and structural building conditions relating to our
properties; access to available and reasonable financing on a timely basis;
the ability to timely and cost-effectively integrate acquisitions into our
operations, including London Clubs; changes in laws, including increased
tax rates, regulations or accounting standards, third-party relations and
approvals, and decisions of courts, regulators and governmental bodies;
litigation outcomes and judicial actions, including gaming legislative
action, referenda and taxation; the ability of our customer-tracking,
customer loyalty and yield-management programs to continue to increase
customer loyalty and same store sales or hotel sales; our ability to recoup
costs of capital investments through higher revenues; acts of war or
terrorist incidents or natural disasters; abnormal gaming holds; and the
effects of competition, including locations of competitors and operating
and market competition.
Any forward-looking statements are made pursuant to the Private
Securities Litigation Reform Act of 1995 and, as such, speak only as of the
date made. Harrah's Entertainment and Harrah's Operating disclaim any
obligation to update the forward-looking statements. You are cautioned not
to place undue reliance on these forward-looking statements which speak
only as of the date stated, or if no date is stated, as of the date of this
press release.
SOURCE Harrah's Entertainment, Inc.
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Related links:
http://www.harrahs.com/
Photo Notes:http://www.newscom.com/cgi-bin/prnh/20070718/HARRAHSLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Media, Jacqueline Peterson, +1-702-494-4829,
or Investors, Jonathan Halkyard +1-702-407-6346, both of Harrah's
Entertainment, Inc.
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