In what’s become the biggest buyout in casino gaming history, Harrah’s executives entered into a deal about a year ago to be absorbed by privately held entities.

The prize: A deal worth $27.8 billion deal (including debt), which included $94 million for CEO Gary Loveman. The company is now set for the deal to close in early 2008.

In late 2006, the world’s largest gaming company has agreed to a takeover by Texas Pacific Group (TPG) and Apollo Management, L.P. The deal is for $16.1 billion in cash and the assumption of $10.7 billion in debt.

Though it sounds like a steep price, the company has revenue of close to $10 billion a year. That provides a wealth of cash flow.

Last week Harrah’s got its final approval, which was from the National Indian Gaming Commission (NIGC). During the last several months the deal has gotten approved by regulators in Nevada, New Jersey, Pennsylvania, Louisiana, Iowa, Missouri, Illinois, Indiana and Mississippi.

The agreement calls for the purchase of all outstanding shares at $90, an approximately 36 percent premium over Harrah's closing share price on September 29, 2006, the last trading day before disclosure of the initial offer made by Apollo and TPG to acquire Harrah's for $81.00 per share. This week Harrah’s shares have been hovering around $88.

While many industry insiders sad the deal would hold up expansion plans, it seems as if the company is sticking to a strategy that was in place before the deal to sell was closed. During the last year Harrah’s has announced some major projects including a massive $1 billion expansion of the famed Caesars Palace in Las Vegas and a new state-of-the-art arena at its namesake Las Vegas property.

The Caesars expansion will add a new hotel tower, a convention center and other amenities when it opens in late 2009. The centerpiece of the expansion is a new 665-room hotel tower dubbed the Octavius Tower. The Octavius Tower will be located adjacent to a new 263,000-square-foot meeting and convention center. Three new luxurious pool villa suites will be built along the second floor of the new tower and will overlook three new swimming pools that will rim an expanded outdoor whirlpool spa retreat, a poolside cafe and nearby garden wedding venue. The new tower will up the total room count from 3,348 to 4,013.

For the arena, Harrah’s struck a deal with AEG announced to build a world class sports arena just steps off the Las Vegas Strip. Set to open in 2010, the approximately 20,000-seat, privately financed, state-of-the-art arena will be situated on 10 acres directly behind the Paris and Bally’s resorts.

In Atlantic City, Harrah’s Atlantic City opened a new 172,000-square-foot glass, dome-enclosed swimming pool complex and Elizabeth Arden Red Door Spa. It’ part of a $550 million expansion that also included a 620-seat contemporary buffet and a retail promenade offering seven unique shopping outlets that opened last winter. The centerpiece of Harrah's expansion project is a new 961-room, 44-story hotel tower featuring eight super-suites and 104 suites appointed with limestone floors, freestanding showers, fireplaces, in-room theaters and plasma televisions. Upon completion in 2008, the new tower will increase Harrah's hotel capacity by nearly 60 percent, offering a total of 2,272 rooms. The new tower will also make Harrah's the tallest hotel casino in Atlantic City and the second tallest building in New Jersey.

At its Tunica property, Harrah’s is investing $45 million to revamp its Grand Casino Resort Tunica. Upon completion it will get a name change to Harrah's Casino Tunica is scheduled for May 2008. The property will undergo a complete first floor reconfiguration including a new entertainment bar, new carpet, lighting, high limit salon and poker room. Other changes as part of the property’s complete overhaul will include the refurbishment of the rooms including new beds, carpet and furniture. Rooms will be refurbished by floor with the first hotel tower to be completed by May of 2008 and the second tower to be completed by September of 2008.

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