Wednesday, October 11, 2006

You Bet? I Raise

The two private equity firms that submitted an $81 bid for Harrah's last week, Apollo Management and Texas Pacific Group, have now increased their bid. The raised bid now sits between $83-84 a share. This comes after Harrah's directors rejected the initial buyout offer. Several sources are now reporting that Harrah's advisors have hinted that the bid needs to be even higher to be worth consideration.

My hope is that the directors listen to their advisors and turn down the bid even at this level. I believe that doing so will benefit the shareholders over the long-term. However, I'm not complaining. If they do accept the sweetened offer, I will be dumping the shares ASAP.


gaamblor said...

I'm thinking about grabbing some nov 80 calls for .50, gambling deals are just so tough to finalize though

I was just looking into KONG it seems like it got crushed because of new laws which require the customers to actually want the product...i would suspect most customers do want their product and they will do just fine, plus they have half the market cap in cash already. I guess you are down a bit in in but do you still like it?

Brute Force said...

One thing to keep in mind if you're going to play with calls on HET is that the deal won't finalize for at least 12 months. And, 18 months would not surprise me. So, you've gotta figure that the shares will trade at a discount to the ultimate buyout price.

Yes, KONG got hammered due to regulation changes in China. I continue to hold it. I went into it knowing it was highly speculative, and at this point it makes up such a small part of the portfolio that it doesn't affect me at all. Sitting on a nice 50% loss... picked it up in September of last year.

I'm not sure how much I like it now, but I haven't done that much keeping up with it since it became such an insignificant portion of the portfolio. I had planned on taking another look at them, but just haven't gotten around to it.