Corporate & Business
Case Study: Gaming Counsel for $32 billion Harrah's Acquisition

Related People
David R. Arrajj, Aubree L. Cherney, Dennis C. Gutwald, Albert Z. Kovacs, Kate C. Lowenhar-Fisher, Angela Turriciano Otto, Frank A. Schreck, Ellen Schulhofer

Related Practice
Corporate & Business, Gaming Law, Hospitality

Client
Texas Pacific Group (TPG) and Apollo Management, L.P. (Apollo)

Challenge
When two private equity firms, Texas Pacific Group (TPG) and Apollo Management, L.P. (Apollo), decided to purchase Harrah’s Entertainment, there were a multitude of gaming and corporate transactional issues that needed to be ironed out. As the world's largest provider of branded casino entertainment, Harrah's operates various licensed gaming subsidiaries on four continents. Any such purchase would require TPG and Apollo entities and principals to file applications and obtain regulatory approvals in all jurisdictions in which it operated gaming facilities. By agreement, the regulatory approvals had to be obtained within 12 months from signing.

Solution
No firm has a better grasp on corporate gaming issues than Brownstein Hyatt Farber Schreck. Acting as legal advisors to TPG and Apollo, Brownstein attorneys organized gaming attorneys in the various jurisdictions and coordinated the regulatory licensing process worldwide. Brownstein’s experience with both domestic and international gaming law helped lend valuable perspective to a deal that encompassed multi-national holdings, including the London Clubs International family of casinos.

To enable TPG and Apollo in satisfying regulatory requirements, Frank Schreck, a named Shareholder in Brownstein Hyatt Farber Schreck, utilized a licensing structure he developed that permits private equity firms to proceed without the necessity of investigating and licensing each individual investor. This licensing structure made the transaction possible.

The landmark Harrah’s deal received shareholder approval in April 2007, and has advanced as planned. Harrah’s shareholders will receive a premium payout on their outstanding shares, and the TPG and Apollo investors will acquire a diverse business entity that is one of the dominant gaming companies in the world.

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