August 23, 2005
Casino operator Harrah's Entertainment (NYSE: HET ) further expanded its newly formidable presence on the Las Vegas Strip. On Monday afternoon, it announced plans to acquire the Imperial Palace Hotel & Casino for $370 million. The deal comes just a couple of months after the company closed on its acquisition of Caesars Entertainment and its four resort hotel/casinos on the Strip.
The Imperial Palace -- a 2,640-room hotel and a 52,000 square-foot casino on 18.5 acres of land -- has long been rumored as a Harrah's takeover target.
More than anything else, Harrah's wants those 18.5 acres. The property lies adjacent to Harrah's flagship Strip property, which currently features 2,526 hotel rooms and more than 30,000 square feet of convention space, on top of 87,700 square feet of gaming space, 85 table games, and 1,381 slot machines. The redevelopment of the Imperial Palace could serve as an expansion to the current Harrah's Las Vegas -- the two properties already share a stop on the Las Vegas Monorail.
It might also be a prelude to something even bigger. The property is also next to the Flamingo hotel/casino acquired in the Caesars deal.
At any rate, the Imperial Palace acquisition improves Harrah's position on the Strip, much of which is currently dominated by rival MGM Mirage (NYSE: MGM ) . That leaves Riviera Holdings (AMEX: RIV ) -- which owns the Riviera hotel/casino next to property owned by Wynn Resorts (Nasdaq: WYNN ) -- as the Strip's prime takeover candidate, along with Aztar (NYSE: AZR ) and its Tropicana property across the street from MGM Mirage's MGM Grand and Mandalay Bay.
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Fool contributor Jeff Hwang holds no financial position in any of the companies mentioned above.