Casino Giant Harrah's Weighs Buyout

Harrah's share-price shot up nearly 14 percent Monday on news that it is being pursued by two private equity firms, Texas Pacific and Apollo Management.

Industry watchers say that, along with Harrah's rich list of properties -- including Caesar's Palace and its namesake casino in Las Vegas -- the company also has a highly valuable consumer database that includes its customers' gambling habits.

And there's the other big benefit of owning a casino.

"The thing that characterizes gaming companies in general is that they do generate a lot of free cash," says Semedes Rose, a gaming-industry analyst with Calyon Securities. Rose warns, however, that the proposed deal could still fall apart.

"I think there definitely could be hurdles," Rose says. "I think Harrah's definitely might want a higher bid for the stock. There could be regulatory or licensing concerns."

For now, Harrah's says it's not clear whether the offer is in the best interest of shareholders.