Bank of America and Deutsche Bank have committed to financing the $27.8 billion buyout of Harrah's Entertainment by Texas Pacific Group and Apollo Management, according to market sources. JPMorgan will also be participating in the financing, though its exact role could not be determined.
The company announced Dec. 19 it would be acquired by the private equity firms for $90 a share. TPG and Apollo originally offered $81 a share in September, but Penn National Gaming jumped in soon after with an $87 per share proposal, which forced the firms to increase their bid. The transaction includes the assumption of approximately $10.7 billion in debt. Calls to a B of A spokeswoman and a DB banker were not returned.
Five or six CMBS lenders are also said to be taking down about $7 billion of debt, which is expected to be securitized in a stand-alone deal. If completed, it would be the largest gaming-oriented deal completed in the CMBS market.
According to a Harrah's release, Deutsche Bank is serving as lead financial advisor to Apollo and TPG. B of A, JPM, Citigroup, Credit Suisse and Merrill Lynch are also serving as financial advisors to the investors. Calls to bankers and spokesmen at the banks were not returned by press time.