Harrah’s to Buy Strip Hotel

Harrah’s Entertainment Inc., the world’s largest casino operator, said Monday that it planned to acquire the faded Imperial Palace Hotel & Casino in Las Vegas for $370 million, aiming to further raise its profile in the gambling mecca.

The pagoda-style Imperial Palace, with a 52,000-square-foot casino and 2,640-room hotel, occupies 18.5 acres on the Las Vegas Strip between Harrah’s Las Vegas and Flamingo, across from Caesars Palace.

In June, Las Vegas-based Harrah’s Entertainment acquired cross-town rival Caesars Entertainment for $6.8 billion. The company owns six properties in the city.

The location of the Imperial Palace fits well with Harrah’s, said Larry Klatzkin, an analyst at Jefferies & Co. With the exception of the Barbary Coast, a casino owned by Boyd Gaming Corp., the deal would give Harrah’s a stretch of properties along the Strip from Paris Las Vegas to Harrah’s, he said.

“This acquisition enhances Harrah’s position in Las Vegas, enabling us to offer our customers the most inspiring array of entertainment and gaming options available in the heart of the Las Vegas Strip: the intersection of Flamingo Road and Las Vegas Boulevard,” Gary Loveman, chairman and chief executive of Harrah’s, said in a statement.

At about $20 million an acre, the property’s $370-million price represents “full land value,” Klatzkin said.

The company’s shares, which closed at $71.83 before the announcement, were little changed at $71.94 in after-hours trading.

Harrah’s is buying the Imperial Palace from the Ralph Engelstad and Betty Engelstad trust. Owner Ralph Engelstad died in 2002.

“The property definitely needs work.... Longer term, they might rebuild,” Klatzkin said.

Harrah’s said it had no plans for substantial operational changes at the casino-hotel in the near term once ownership had transferred.

The company said it would not assume any debt with the Imperial Palace transaction, expected to close by year-end.