Harrah's Entertainment Buyout

Harrah's Entertainment, Inc. (HET)
$17.1B Going Private Proposal

Increased Offer Accepted 12.19.06

Increased offer from Apollo Mgmt and
Texas Pacific Group

$90 per share, increased from original offer of $81

$17.1B equity value; $27.8B including assumed debt
Press release
Form 8-K
Background of the Merger

Acquisition approved 4.05.07

Closed 1.28.08

Amendment #1

Buyout Proposed 10.02.06

By Apollo Mgmt and Texas Pacific Group

Initially offered $81 per share

$15.1B equity value; $25.7B including assumed debt
HET business description

Offer increased by 3% to $83.50 per share

Buyers will need to get gaming approvals

Could be an extended process, if waivers can't be obtained

Special committee established
Advisors hired

UBS, as financial advisor
Kaye Scholer, as legal advisor

Financing plans said to include securitization of
casino real estate

Announced 10.02.06

Other HET developments

Credit default swaps rose before announcement
Acquires "Barbary Coast" from Boyd Gaming 10.02.06
Amends credit agreement 9.29.06

Increases borrowing capacity to $5B

Offers to buy London Clubs for $530mm 8.31.06

UK offer announcement

Gaming is a hot M&A sector

Kerzner International is in a $3.6B buyout
Aztar got four competing bids in Spring 2006
HET acquired Caesar's Entertainment for $9.4B in 2005

See Gaming Companies

Advisors

Financial

HET special committee: UBS

Legal

Sponsors: Cleary Gottlieb - Wachtell Lipton
HET special committee: Kaye Scholer / Latham & Watkins

Merger Agreement

General

EDGAR filing
Hyperlinked version
Detailed hyperlinked index follows

Article I The Merger

1.01 The Merger
1.02 Consummation of the Merger
1.03 Effects of the Merger
1.04 Certificate of Incorporation and Bylaws
1.05 Directors and Officers
1.06 Conversion of Shares
1.07 Conversion of Common Stock of Merger Sub
1.08 Withholding Taxes
1.09 Subsequent Actions

Article II Dissenting Shares; Payment For Shares; Options

2.01 Dissenting Shares
2.02 Payment For Shares; Options; SARS; Restricted Stock
2.03 Closing of the Companys Transfer Books
2.04 Treatment of Equity-based Awards & Deferred
Compensation
2.05 Further Actions

Article III Reps

3.01 Organization and Qualification
3.02 Capitalization
3.03 Authority for this Agreement; Board Action
3.04 Consents and Approvals; No Violation
3.05 Reports; Financial Statements
3.06 Absence of Certain Changes
3.07 Proxy Statement; Other Filings
3.08 Brokers; Certain Expenses
3.09 Employee Matters
3.10 Employees
3.11 Litigation
3.12 Tax Matters
3.13 Compliance with Law; Gaming Permits; No Default
3.14 Environmental Matters
3.15 Intellectual Property
3.16 Real Property
3.17 Material Contracts
3.18 Insurance
3.19 Questionable Payments
3.20 Related Party Transactions
3.21 Opinions
3.22 Required Vote of Company Stockholders
3.23 Gaming Approvals

Article IV Parent and Merger Sub Reps

4.01 Organization and Qualification; Certificate of
Incorporation; Bylaws
4.02 Authority for this Agreement
4.03 Proxy Statement; Other Filings
4.04 Consents and Approvals; No Violation
4.05 Financing
4.06 Operations of Parent and Merger Sub
4.07 Gaming Approvals and Licensing Matters
4.08 Guarantee
4.09 Ownership of Common Shares
4.10 Interest in Competitors
4.11 Solvency of the Surviving Corporation
4.12 Management Agreements

Article V Covenants

5.01 Conduct of Business of the Company
5.02 Solicitation
5.03 Access to Information
5.04 Stockholder Approval
5.05 Efforts; Consents and Governmental Approvals
5.06 Indemnification and Insurance
5.07 Employee Matters
5.08 Takeover Laws
5.09 Proxy Statement; Other Filings
5.10 Notification of Certain Matters
5.11 Financing
5.12 Subsequent Filings
5.13 Press Releases
5.14 Treatment of Certain Notes

Article VI Conditions to Consummation of the Merger

6.01 Each Party
6.02 Parent and Merger Sub
6.03 Company

Article VII Termination; Amendment; Waiver

7.01 Termination
7.02 Effect of Termination
7.03 Fees and Expenses
7.04 Maximum Recovery
7.05 Amendment
7.06 Extension; Waiver; Remedies

Article VIII Miscellaneous

8.01 Representations and Warranties
8.02 Entire Agreement; Assignment
8.03 Jurisdiction; Venue
8.04 Validity; Specific Performance
8.05 Notices
8.06 Governing Law
8.07 Interpretation
8.08 Parties in Interest
8.09 Rules of Construction
8.10 Counterparts
8.11 Certain Definitions

SEC Filings

Schedule TO 12.24.07

Amendment #1 1.23.08
Amendment #2 1.28.08

Press release

Proxy Solicitation

Shareholders approve deal

Press release 4.05.07

Proxy statements

Definitive proxy statement 3.14.07
Preliminary proxy statement 2.08.07

Deal Protection

No shop covenant

Merger agreement §5.2
Proxy statement disclosure

Break-up fee

$500mm, plus out-of-pocket expenses
Agreement §7.3
Proxy statement disclosure

Regulatory Approvals

HSR Act

Merger agreement §6.1(d)
Proxy statement disclosure

Fairness Opinion

UBS fairness opinion

Proxy statement disclosure

Tax Matters

Disclosure

Proxy statement disclosure

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