Harrah's seeks glitz of Las Vegas in London Clubs International

Harrah's Entertainment Inc., the Las Vegas-based world's largest gaming company, said Thursday it would buy London Clubs International PLC in a deal worth $530 million (£279m).

The UK's leading casino operators, LCI accepted the deal and the London Clubs board has unanimously recommended that its shareholders accept the offer. The deal, which will see Harrah's pay 125 pence a share, is expected to complete by the end of the fourth quarter of 2006.

LCI, a market leader in London and with four of the 24 licenses currently in the city, operates six casinos in the United Kingdom and has an additional five under development. It also operates a pair of casinos in Egypt, one in South Africa and has a consulting stake with another in Lebanon. The Group operates wholly owned casinos in the United Kingdom and joint ventures and management contracts overseas and prides itself on its high standards of catering and providing quality food at all of its casinos.

About its acquisition of LIC, Harrah's chairman and Chief Executive Gary Loveman said, "London Clubs International is a highly attractive way for Harrah's Entertainment to establish its presence in the UK market,” adding that "LCI has one of the leading positions in the UK casino market and through the new licences that it has recently been awarded will be able to further enhance its position."

On the other hand, Harrah’s is a gaming corporation that owns and operates casinos, hotels, and five golf courses under several brands. The group is operating and managing some 40 properties, including casino hotels and riverboat and dockside casinos. It is the owner of the most famous Caesar's Palace in Las Vegas.

Emphasizing on the stronger future of the properties after the acquisition, Mr. Loveman said, "London Clubs has a strong collection of properties that are well positioned in the United Kingdom's evolving regulatory framework. Under Harrah's ownership, these international properties will even be stronger in the future."

If Harrah's get successful in acquiring LCI, which had been in talks on a possible merger with competitor Stanley Leisure Plc., it will bring a little of the Las Vegas glitz to LCI's mid-market London casinos: Fifty, The Rendezvous, The Sportsman and The Golden Nugget.

The deal represents a setback for Stanley Leisure, which told the stock market towards the end of June that it was holding takeover talks with London Clubs. However, Stanley confirmed today that those talks have been terminated. Still it’s shares gone up by 30p to 648.5p, a rise of nearly 5 per cent.

However, the deal seems almost done, some regulatory approvals are still required, but the decision still remains pending as Genting Bhd., Asia's largest publicly traded casino operator, which owns almost 30% of London Clubs and also holds about 20% of Stanley Leisure's stock, is the key decision-maker and its consent is still sought.

Shares of London Clubs rose as much as 32.5 pence, or 33%, to 131.25 pence in London and traded at 130.75 pence as of 11:43 a.m. local time today, valuing the company at 289 million pounds.