Harrah’s to Acquire Showboat for $1.2 Billion

Harrah’s Entertainment Inc. has agreed to buy rival casino owner Showboat Inc. for about $1.2 billion in cash and assumed debt in a deal that will make it the world’s biggest gaming company. The move will strengthen Harrah’s presence in Atlantic City, N.J., where Showboat has a solid position on the popular boardwalk. Las Vegas-based Showboat had long been viewed as a takeover target and the company’s stock rose sharply earlier this week on speculation that a deal may be forthcoming. Under the proposed transaction, Harrah’s will pay $519 million, or $30.75 a share, in cash, and assume $635 million of Showboat’s debt. Showboat’s stock jumped $8.44 to close at $29.56, and shares of Memphis, Tenn.-based Harrah’s gained $1 to close at $18.19. Both trade on the New York Stock Exchange.