Harrah's Entertainment agreed to a consider a $90-a-share bid from Apollo Management and Texas Pacific Group. The deal is the end of more than two months of negotiations between Harrah's and the private equity groups.
Harrah's -owner of the US casino firm Caesars and UK casino operator London Clubs International- is currently in the process of buying rival Las Vegas casino Barbary Coast Hotel and Casino from Boyd Gaming.
Apollo Management and Texas Pacific Group unveiled a $81-a-share offer for Harrah's and after the rejection a new offer marks a 35% premium on the price of Harrah's shares two months ago.
The company said that while it backed the private equity groups' current bid, it remained open to higher offers. "I don't expect further bids, but anything is possible," chief executive Gary Loveman said.
The deal is subject to shareholder backing, while regulatory approval could take more than a year.