The world’s largest gaming company, Harrah’s Entertainment, is looking to bust into the casino markets of the United Kingdom. It was recently revealed that the firm, valued at $11 billion, is looking to buy two British casino groups, Stanley Leisure and London Clubs International, which are currently waffling on the completion of a ₤634 million merger.
According to sources in the American gaming community, the behemoth Las Vegas firm has made a detailed appraisal of both British companies. However, it appears that LCI have stalled on the talks with Stanley Leisure. Everything was set for the merger more than a month ago, when LCI suddenly announced they would be entertaining other offers. Clearly the interest of the American casino firms has caused a certain amount of turbulence in the market.
Gary Loveman, the chief executive of Harrah’s, was reported to be waiting until this merger was complete before he moved in on the acquisition. But now that talks between the two British firms have stalled, Harrah’s is expected to choose its target very soon, and many believe it will be London Clubs International.
Loveman, a former Harvard Business School professor and the son of a factory worker, is determined to expand his company’s overseas activities. Harrah’s share price has dropped from $80 to $60 in recent month, mainly due to the escalating costs of construction in Las Vegas. In order to combat this concern, Loveman is believed to be stepping up the pace of international expansion. Already they tried to acquire the rights to develop new casinos in Singapore and Macao, but were outbid. They appear now to be intent on cornering the European gaming market. Experts believe that the acquisition of LCI/Stanley Leisure would give Harrah’s a vital foothold in Europe and the ability to establish a strong presence throughout the continent.
Harrah’s was best known for its riverboat casinos on Native American reservations until two years ago when it purchased Caesar’s Entertainment for a whopping $5.3 billion. That deal cemented Harrah’s position as the world’s largest gaming company, surpassing Kirk Kerkorian’s MGM Mirage.
The founder of the American company, William Harrah, was seen as one of the architects of modern Las Vegas, along with Kerkorian. He lobbied for increase gambling regulations in order to stamp out corruption and the presence of the mafia. Now the company is in the hands of the newly-appointed Loveman, who is known to have immediately traded in his Honda Accord for a Ferrari F-355 Spider following the job offer.
The invasion of American gaming giants has long been anticipated in the United Kingdom, but up until now most of the companies have either been too small to interest the Americans or the gaming giants had been too busy focusing on other parts of the globe. It will be interesting to see what becomes of the British firms, and particularly if foreign takeover will result in the purging of the existing management. An announcement is expected later this month.