Harrah's Entertainment, Inc. and Harrah's Operating Company, Inc. Commence
Tender Offers and Consent Solicitations for Debt Securities and Convertible
Debt Securities
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.
Media, Jacqueline Peterson, +1-702-494-4829, or Investors, Jonathan Halkyard
+1-702-407-6346, both of Harrah's Entertainment, Inc.
