Digital Bulletin

LAS VEGAS -- Harrah's Entertainment Inc., the world's largest casino operator, said today it has received a $15.05 billion offer for the company from private-equity firms Apollo Management and Texas Pacific Group.

Harrah's operates about 40 casinos and is hoping to do so in Rhode Island, in conjunction with the Narragansett Indian tribe.

After news of the offer was publicized today, Harrah's shares surged $9.52, or 14.3 percent, to $75.95 in midday trading on the New York Stock Exchange.

Harrah's said it has established a special committee of independent directors to review the offer and has retained UBS Securities LLC as an adviser, but had not committed to the deal.

"The Special Committee has not determined that a transaction is in the best interest of Harrah's and its stockholders," it said in a release. "There is no assurance that Harrah's will enter into this or any other transaction."

The company did not immediately respond to calls for comment.

Harrah's operations include Caesar's Palace in Las Vegas, its namesake chain, Bally's, Horseshoe, Showboat and other brands throughout the country. The Las Vegas-based company beefed up its portfolio with last year's purchase of Caesars Entertainment Inc., giving it an upscale offering on the Las Vegas Strip.

In Rhode Island, Harrah's is supporting an effort to change the state constitution to allow it and the Narragansett Indian tribe to put a casino in West Warwick. A spokeswoman for a Harrah's-funded group pushing for the casino did not return a phone message seeking comment on whether the deal would affect the company's plans in Rhode Island.

But the leader of the tribe said it wouldn't.

"Harrah's has advised me that it remains 100 percent committed to the Narragansett Indian Tribe as its chosen partner, to the people of Rhode Island, and to building the Narragansett Indian Casino," Chief Sachem Matthew Thomas said in a written statement.

Thomas' statement did not address a call by the anti-casino group Save Our State, which urged Harrah's to release an agreement it made with the tribe.

"In light of today's news, we need to know if there is a contingency plan, and the only way to know that is for Harrah's to release the partnership agreement in full," the group said in a written statement.

The proposed constitutional amendment that will appear on November's ballot does not specifically name Harrah's as the tribe's partner. It says:

"The resort casino shall be privately owned and privately operated by a business entity established pursuant to Rhode Island law by the Narragansett Indian Tribe and its chosen partner," reads the proposal called Question 1.

Analyst Rod Petrik of Stifel Nicolaus said Harrah's shares had been relatively cheaper than its peers in the casino business for several reasons, "perhaps none more important than its inability to crack into the growing Asian gaming markets."

Casino companies also appeared cheaper than other shares, providing a prime target for private equity investors, he said in a research note.

Other gambling shares also surged on the news.

Shares in the world's second largest casino company, MGM Mirage Inc., rose $1.60, or 4 percent, to $41.09; Las Vegas Sands Corp. was up $1.06, or 1.6 percent, to $69.41, and Wynn Resorts Ltd. rose $2.68, or 3.9 percent, to $70.69.

Also on Monday, Harrah's said it entered a deal with a unit of Boyd Gaming Corp. to exchange about 24 contiguous acres that Harrah's controls on the Las Vegas Strip for Boyd's Barbary Coast Hotel and Casino. Financial terms for that deal were not disclosed.

The real-estate transaction is expected to close in the first quarter of 2007, subject to customary closing conditions, including government approvals. Boyd said it expects to see a non-cash gain of about $280 million in the quarter the deal closes.

-- With Providence Journal reports