Paulson & Co. invests $351 Million in Harrah’s Entertainment
|June 7th, 2010||
|Paulson & Co. announced that it will take a 9.9% equity stake in Harrah’s Entertainment Co. According to the Wall Street Journal, John Paulson’s hedge fund will provide a cash injection valued at $351 million. This continues Paulson & Co.’s recent run of investments in the gambling sector, as the firm is already a major shareholder in MGM Mirage and Boyd Gaming Corp.|
Together with Apollo Management LP and TPG Capital LP, a total of $550 million will flow into Harrah’s—which will then be exchanged for a 15.6% equity stake for the three firms. The troubled casino company plans to use the funds to service its debt and make a series if investments overseas, especially in gambling hotspot Macau.
In a statement, Harrah’s CEO Gary Loveman commented: “This is an important transaction for Harrah’s Entertainment for a number of strategic reasons. We are raising capital for emerging domestic and international growth opportunities, and upon closing of the exchange, will reduce our debt and lower our interest expense. The investment from Paulson, an independent third party and a large sophisticated investor, reflects the strong and resilient performance of our company, particularly as we emerge from a difficult economic climate, and the encouraging prospects for our future. We also are gratified by the confidence in Harrah’s demonstrated by our sponsors, Apollo and TPG.”
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