HARRAHS TO BUY HORSESHOE

Harrah's Entertainment, continuing in its mission to buy the letters R, S, and H, has announced its plans to acquire Horseshoe Gaming. Brought to you by the letter A and the number 3, here is the announcement, straight from the Harrah's mouth, as it were (I ripped this directly from the press release):

LAS VEGAS, September 11, 2003 – Harrah’s Entertainment, Inc. (NYSE:HET) has signed a definitive agreement to acquire Horseshoe Gaming Holding Corp. for $1.45 billion, including assumption of debt.
Privately held Horseshoe operates leading casinos in Hammond, Indiana, Tunica, Mississippi, and Shreveport-Bossier City, Louisiana. Each of Horseshoe’s shareholders has committed to sell their shares, subject to customary conditions.
Harrah’s also intends to sell its Harrah’s brand casino in Shreveport to avoid overexposure in that market, but will retain its Louisiana Downs thoroughbred horse-racing track and casino in Bossier City. Harrah’s expects no other property sales related to the Horseshoe transaction.
Subject to customary approvals, the acquisition and sale are expected to close in the 2004 first quarter. After consideration of the Harrah’s Shreveport sale, the Horseshoe acquisition would add a net 107,100 square feet of casino space, more than 4,360 slot machines and 138 table games to Harrah’s existing portfolio of 1.53 million square feet of casino space, more than 42,000 slots and nearly 1,150 table games.
“This acquisition enhances our efforts to become the nation’s leading distributor of casino entertainment and bolsters our near-term and long-term growth prospects,” said Gary Loveman, Harrah’s Entertainment president and chief executive officer. “The Horseshoe franchise is a tremendous strategic fit in that its business model, like ours, is centered around gaming and providing outstanding customer service.
“Also like Harrah’s, Horseshoe enjoys an enormously loyal player base and highly recognizable brand,” Loveman said. “We believe our proven ability to apply sophisticated operating capabilities and drive strong cross-market play will help enrich the Horseshoe brand and benefit customers of both companies.
“This deal also demonstrates our industry-leading financial strength and flexibility, which allow us to pursue attractive growth investments and maintain our debt rating even while distributing a sizable dividend to our shareholders,” Loveman said. “Coupled with our longer-term expansion prospects in both the United States and United Kingdom, the Horseshoe acquisition positions us for a decade of growth.”
The acquisition is not subject to financing, and Harrah’s expects to maintain its investment-grade credit rating.
“At a price of about 7.2 times analysts’ estimates for Horseshoe 2004 earnings before interest, taxes, depreciation and amortization, this acquisition is both fair to the sellers and is expected to be immediately accretive to our earnings,” Loveman said. “In addition, within two years of closing the transaction, we expect to achieve about $36 million of annual savings from operating synergies.
“Horseshoe Gaming owner Jack Binion has created enormously popular casinos providing the high-quality amenities and superior customer service and recognition that generate lasting player loyalty,” said Loveman. “We are especially pleased that Jack, who has developed personal friendships with so many of his players, has agreed to assist us with the ownership transition for the three casinos that will continue to bear the Horseshoe name.”
The purchase agreement calls for Binion to provide guidance on both the integration of the Horseshoe properties into the Harrah’s network and expansion of the Horseshoe brand into other markets.
“In addition to retaining the Horseshoe name, the three acquired properties will continue to focus on providing superior, distinctive casino entertainment to their customers,” Loveman said. “Once integration is complete, Horseshoe customers will be included in our Total Rewards player-loyalty program and Harrah’s customers will be able to redeem rewards at Horseshoe casinos.
“Total Rewards and our nationwide geographic distribution were key factors in the 20 percent growth of cross-market play at our casinos last year,” Loveman said. “We expect the addition of the high-quality Horseshoe properties and customer base to our portfolio to enhance that performance.”
Harrah’s Entertainment was advised

So Horseshoe properties will remain Horseshoe properties, but I would expect to see changes. Just like the new owner or GM of a team will inevitably fire the coach/manager, you don't spend over $1.4 billion on three casinos to leave them alone. Hopefully this goes more smoothly than the integration of the Rio into Harrah's Inc.
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NEW TROPWORLD ORDER?

That's for those who remember the days of Tropworld, in the late 80s/early 90s, when Atlantic City's Tropicana decided to take one of its biggest assets--it's immediately-recognizable name--and change it to TropWorld. Well, they're at it again. For some reason known only to Trop execs and their confidantes, they decided to create a buzz for their renovation project by using the image of Fidel Castro to promote it. This article from the AC Press hits the nail squarely on the head:

When Fidel Castro capped his revolution in Cuba by entering Havana on New Year's Day 1959, many of his exultant followers looted the city's casinos.

The gaming halls, including one named Tropicana, were examples of capitalist corruption, Castro's communists said.

Now, Castro's likeness is shilling for a local casino - also with the name of Tropicana - on a billboard advertisement that is angering Cuban Americans, including Assembly Speaker Albio Sires, D-Hudson. He is calling for a boycott of the gaming hall.

The Tropicana Casino and Resort billboards are along Route 40 and the Atlantic City Expressway. They show Castro's likeness and his trademark cigar, and have a slogan, "The Next Revolution."

Tropicana spokeswoman Maureen Siman said the advertisements are for The Quarter, the casino's $245 million entertainment, dining, retail and spa development project.

"The point is, what we're doing is revolutionary," Siman said. "The project is going to change Atlantic City in a positive way, in a revolutionary way.

"We are not making a political statement."

But officials with the Cuban National American Foundation in Miami said Wednesday that callers from the Atlantic City area feel otherwise.

"They are letting us know about this and are expressing their dismay that such a display is in place and using the figure of a killer like Castro," foundation spokeswoman Mariela Ferretti said.

"There's no question that it's pretty distasteful. It's just unfortunate that someone should choose to portray a figure of a man who still has 11 million subjugated citizens on the island.

"Based on that slogan, it doesn't bode well for Atlantic City," Ferretti said.

While New Jersey has a sizeable Cuban-American population, Ferretti said, the foundation is getting complaints from both Cuban Americans and non-Cuban Americans....
According to Siman, the phone calls and controversy are an indication that Tropicana's advertising message "is not clear."

"We are looking at ways on how to make our message more clear," she said.

The whole idea of Castro supporting a casino is rather ironic, especially given the message Castro and his forces were trying to send when they pillaged Havana's casinos, Ferretti said.

"It was a statement they were making, that the revolution was against all of that," she said. "They saw it as a social evil."
FULL STORY

Stories like this make my job simple and enjoyable. This just so perfectly captures the limited historical depth that many bring to the table. Perhaps a more distant revolution, with no living victims, would have been more appropriate. At least they didn't use Usama Bin Laden.
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SUBURBAN XANADU UPDATE

amazon.com sales rank: 753,119, still 2 reviews

bn.com sales rank: 163,913, still 2 reviews

A week from today, on Thursday, September 18, at 7pm, I am having a signing at the Summerlin Barnes and Noble.

That's all for today.

posted by Dave at 9:16 AM