Harrah's Hits $17 Billion Jackpot - WLOX.com - The News for South Mississippi

Harrah's Hits $17 Billion Jackpot

Right after Katrina, Harrah's had plans to pump a billion dollars into its Biloxi resort. But that got put on hold.

Tuesday's announcement could have a profound impact on south Mississippi's casino industry. Bernie Burkholder thinks it's definitely having an impact inside Grand Biloxi.

"There's a lot of anxiety right now probably with those Harrah's employees," the former Treasure Bay executive said.

Katrina dramatically changed the look of Biloxi's Casino Row. And to insiders like Burkholder, Harrah's decision to sell its casino conglomerate, including Grand Biloxi, could have a similar impact.

"I see a lot of change in the industry," he said.

Burkholder is keenly aware of how the Harrah's brand, and that company's deep pockets could have revitalized east Biloxi.

"I think it's a disappointment for the market obviously," he said.

However, Harrah's board members see the sale to Apollo Management and Texas Pacific as an opportunity for the entire company.

"In Apollo and TPG, we will have owners who share our vision for Harrah's, are fully supportive of our current strategy and are committed to helping us execute on it," a Harrah's news release announcing the sale said.

A statement from TPG's founding partner David Bonderman said, "We believe we will be able to help Harrah's deliver on its growth strategy."

After Katrina, part of that growth included a billion dollar proposal for Grand Biloxi. But that project got tabled a couple of months ago.

Grand Biloxi's closest neighbor is the Isle of Capri. Bill Kilduff is the Isle's General Manager.

"What we definitely want in Biloxi is we want quality operators," he said. "We want bigger and better facilities. We want to raise the bar. And we want to make the gulf coast the ultimate tourist destination for the southeast."

Kilduff admits any future plans for Grand Biloxi could sway how much money his company invests in its resort. Isle of Capri executives have told Biloxi leaders on numerous occasions they're seriously thinking about building several new additions to their Point Cadet casino.

"We're actively looking at expansion plans right now," Kilduff said. "Obviously, when you make a decision, you take all factors into consideration. When you look at investing several hundred million dollars, you definitely want to make a wise decision."

Despite the questions about what the new owners may do with Grand Biloxi, Burkholder believes now is the perfect time for other casinos to reinvest in their properties.

"Most certainly," he said. "I don't think it will stop the one's that are smart and are entrepreneurs."

Harrah's believes it's found a smart entrepreneur in the private equity partners it's selling its casino conglomerate to.

"Harrah's management team and its 85,000 talented employees look forward to working with Apollo and TPG as the Company moves into the next phase of its growth and development," Harrah's chairman Gary Loveman wrote.

The news release didn't specify if that next phase of growth included the billion dollar plans once proposed for Grand Biloxi.

Here's a breakdown of the Harrah's deal In case you're a Harrah's shareholder, share of Harrah's stock will be sold for $90. The new ownership group will also be absorbing more than $10 billion in debt. That, plus the $17.1 billion dollar purchase price, brings the total value of the Harrah's deal to more than $27 billion.

It will take about a year for the Harrah's deal to get the necessary approvals from stockholders and regulatory agencies.

By Brad Kessie

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