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Harrahs Stay Mum on Takeover Issue

The world's largest gambling company, Harrah's Entertainment, declined to comment on the reports that it is planning to take over two large British gaming operators that are in the process of merging.

It has been reported that Harrah's has been studying a proposal to buy Stanley Leisure Organization, a company who is in the middle of merger talks with London Clubs International, a deal estimated to have a price tag of $1.2 billion.

"We don't comment on market rumors," Harrah's spokesman Alberto Lopez said.

"The British market is in the midst of a rapid expansion, and a British presence would serve as a good base for watching over Harrah's European growth projects, namely in Spain and Slovenia," said Bear Stearns analyst Joe Greff. Greff believes that the acquisition could make sense, at the right price.

Harrah's is also currently working on a casino project in the Bahamas and is planning to redevelop its casino properties in Las Vegas, Atlantic City and Biloxi, Mississippi.

Greff believes that at current stock prices, a deal to take over Stanley Leisure and LCI would be more or less neutral to Harrah's earnings per share, however the deal would dilute earnings per share at higher prices, not including possible cost savings or revenue gains.