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Harrah's chief reveals efforts to purchase Planet Hollywood

Harrah's Entertainment Chairman and Chief Executive Officer Gary Loveman told employees Wednesday the company is trying to buy the Planet Hollywood Resort.

Harrah's Entertainment has been quietly negotiating with holders of Planet Hollywood's debt in a bid to acquire the property through a debt purchase, multiple people familiar with the situation said this week.


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  • "As a result of our purchase of their debt, we are working on a plan that also would allow Harrah's to own and manage the property," Loveman's said in an e-mail to employees.

    The Review-Journal first reported in September that Harrah's was buying some of the property's $860 million debt, which is currently in default.

    At that time, Harrah's controlled nearly $140 million of the property's debt.

    Loveman's memo said the company's interest is due to the fact that the resort sits on the southernmost end of a line of Harrah's-owned casinos on the east side of Las Vegas Boulevard. The operator also owns Harrah's Las Vegas, Imperial Palace, Flamingo Las Vegas, Bill's Gamblin' Hall & Saloon, Bally's and Paris Las Vegas.

    "This is an attractive proposition because of Planet Hollywood's proximity to our other resorts on the Strip, its high-quality product offering and its strong brand name," Loveman said. "This move is the latest example of our strategy to make purchases or acquisitions capitalizing on opportunities created by current economic conditions."

    The acquisition of the 35-acre Planet Hollywood would give Harrah's control of all 126 acres between Flamingo Road and Harmon Avenue.

    It would also add 2,496 hotel rooms to Harrah's inventory of 20,370 rooms on or near the Strip.

    That would still be 35 percent fewer rooms than MGM Mirage's 35,168 rooms at nine Strip hotels. MGM Mirage will be adding another 5,943 rooms when it begins opening its CityCenter project next month.

    Planet Hollywood officials did not return a request for comment.

    Planet Hollywood Resort is owned by a partnership between restaurateur Robert Earl and private equity firm Bay Harbour Management. Starwood Hotels & Resorts Worldwide holds a minority share in the property and manages the hotel's food and beverage operations.

    Earl and Bay Harbour acquired the old Aladdin out of bankruptcy from Aladdin Gaming on Sept. 1, 2004, for $510 million.

    The property's long-term debt load swelled to $820 million in 2006 when the partnership borrowed money to remodel the property.

    The property has been struggling with declining revenues because of the recession.

    Contact reporter Arnold M. Knightly at aknightly @reviewjournal.com or 702-477-3893.

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    No Handle wrote on November 27, 2009 12:29 AM: Correction:

    Should be (see Wednesday's pre-publication article for more comments). That is where most of Harrahs' employees commented. Nevertheless, the news moves on and we will have more opportunities to comment about this issues later.


    No Handle wrote on November 26, 2009 11:55 PM: Bravo to the Harrahs' employees for their comments about this potential take-over (see Friday's pre-publication article for more comments).

    Having an outlet to honestly vent your feelings and to discuss issues, that affect your lives, without recourse is a breath of fresh air. However, beware. The RJ has run some controversial articles about Harrahs' in the past with Harrahs coming back at the RJ in full battle gear including an economic boycott of the paper. So your harsher comments are probably going to see the light of day. On the other hand, that other big casino company is so sensitive towards the truth that they can collectively--feel a pea through twenty mattresses and the twenty feather beds--rich princesses and princes have tender behinds. As a consequence, they have used silly technicalities to block comments and free speech. Both organizations attempt to control your personal life in so many ways. Make a comment on an open forum, write an article, speak openly to a third-party about something connected to your organization and see how quickly an investigation opens up. They are like killer bees with a primitive nervous system and will react instinctively to any perceived threat to their nest. But, we all know the commandantes and generals are only in the final analysis concerned about their own self-aggrandizement. Their actions speak loader then words. I will reserse further comments for a more appropriate article comment.

    Harrahs' employee protect yourself and the integrity of your comments. Remember the offended organization will converted your fact to opinion and vice versa. They will twist libel every which way. Leave a link for your facts (see comment policy above). Do not discuss your comment with anyone. Ignore your organizations scare tactic--standards for social media outside the work environment. This is not China.


    LOLOL wrote on November 26, 2009 07:23 PM: I used to work for a Harrah's property in Vegas... i feel so bad for PH employees. From the frying pan into the fire... Thank God for Steve Wynn, Phil Ruffin and the Maloofs or Vegas would be completely DEAD.


    real1 wrote on November 26, 2009 07:13 PM: NOT GOOD AT ALL FOR VEGAS


    Chet wrote on November 26, 2009 04:00 PM: Please please end this right here right now...For the people of this community we deserve to have a healthy competition among our casino's. It is now the time to extinguish these giant corporations ego that they think they are the decision makers in this town...We should have learned our lesson last time one of the giant players bought up all the strip...I don't give a nickel about the debt exchange or how it makes this company have a better "brand name" blah blah what a bunch of corporate jargon...I need my boots on to read this article cause the "you know what" is pretty high. Please contact your nearest county commissioner, gaming control board member or state leader etc and help put a stop to this.


    Can you say MONOPOLY wrote on November 26, 2009 02:37 PM: MONOPOLY!!!


    vegas al wrote on November 26, 2009 02:18 PM: MONOPOLY. Harrahs and Loveman have destroyed Las Vegas . Vegas is done. Thanks Harvard grad and corporate america. Vegas is a RIP-OFF


    Green Dragon Regular wrote on November 26, 2009 11:38 AM: Highly visible peeling paint on Bally's exterior. Vandalized elevators. Exhaust fan "skidmarks". No identity-building headliner at Paris. A zero in the club market (Pure doesn't count- leased space). The least creative, most poorly executed F&B ops (Mesa Grill, Guy Savoy, Rao's, Mon Ami Gabi, and Eiffel Tower are all independent from Harrah's and make the hotel-operated outlets look like UNLV student projects). This company is "good-enough management" at its finest.

    Very telling yesterday when Bellagio's marquee had Officer Nettleson's picture up as the funeral procession rolled past while Bally's was playing ads for Cher. Tin-eared and blind corporate citizens.

    Loveman is a coal miner in a gold mine.


    EES wrote on November 26, 2009 11:20 AM: My wife and I stay at one of Harrahs propertys every we come to Vegas from Ohio(about 5 times per year). Last year I ended up in the Hospital with a blood clot for a week. Harrahs mgr contacted my wife and told her to just stay in their hotel as long as necessary, and they never charged us a dime.We didnt know what to do since we really didnt know where my wife could stay for an extended time without paying a big hotel bill. My hospital stay cost 59000.00 and I am sure I paid for several illegals that were also there and not paying.Harrahs gave us great treatment, and I cant understand the neg coments on the food there. Buffet in my opinion is as good good or better than anywhere else, unless we have not saw the better ones. I really dont like to see one hotel chain buy up all the ones on the strip. We will be returning to Harrahs in December and again about 4 to 5 more trips in the coming year barring any bad hrealth conditions. Were 74 and 73 years old.


    ....Temujin...Khan..of..the..Yakka..Mongols... wrote on November 26, 2009 11:04 AM: .
    ..
    ...This week marks the twentieth anniversary of the opening of Steve Wynn's Mirage after a stagnant fifteen years of Vegas history. Other casinos woke up and began to spend money and update their properties and venture into new themed enterprises. I set foot a month after the Mirage's opening and was lucky to be comped for the Roberto Duran- Sugar Ray Leonard fight at the new Casino. A great week for my first taste of Las Vegas.

    ...A month later I decided to give Vegas a shot and came back out for the Holiday Bowl in San Diego where dear olde Penn State
    and Brigham Young had a wild blow out game.

    ...Soon I became a busy ironworker and later became a stagehand at night.
    A happy warrior was I, as my schedule was mainly a day in the sun working Strip projects, a quick change and busy night working either a couple of shows or a set up for a convention or party at the old hotels and a glorious finish to a busy day by having a couple of generous scotch and waters at
    the then hot Crazy Horse II.

    ...Two decades have flown by quickly and the once frequent paychecks from Bally's have changed from Bally's to Hilton Properties, then Park Place and now Bally's/Paris- Harrah's. Now the Showroom crew is the only one receiving house checks from Harrah's.


    ... Long term production crews have been replaced by Encore Productions supplying the manpower at several hotels for convention services, concerts and corporate parties. The new Paris ballrooms and convention facilities dwarfed the decades old time
    rooms at Bally's. The same for Caesar's


    ...I remember long time disappearing house crews telling me that some day only two or three corporations would own all the casinos in Vegas , unfortunately they spoke the truth..

    ...Happy Thanksgiving my fellow citizens..


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