updated 10/11/2006 1:11:55 PM ET 2006-10-11T17:11:55

Private equity firms Apollo Management and Texas Pacific Group have raised their bid for Harrah's Entertainment, the world's largest casino operator, to more than $15.5 billion, the New York Times reported on Wednesday, citing people involved in the negotiations.

The bid is now worth $83 to $84 per share, the Times said. The company's advisers have signaled to Apollo and Texas Pacific that the offer is too small, the Times said.

The first offer was worth $81 per share, or around $15 billion in cash. The new offer, submitted this week in a letter to Harrah's board, came after the company's directors rejected the original bid, the Times said.

Spokesmen for Apollo, Harrah's and Texas Pacific could not immediately be reached.

Harrah's confirmed on October 2 that it had received a buyout offer from the private equity firms worth $81 per share.

The proposed deal, which would rank as the fifth-largest leveraged buyout on record, signals new interest in the gambling sector by heavily funded private equity groups, which have struck big deals this year in health care, media and technology.

Las Vegas-based Harrah's -- which owns or manages more than 40 casinos, mainly under the Harrah's, Caesars and Horseshoe brands -- gave no indication after the original bid that it would accept the deal. It said it had formed a special committee of its non-management directors to review the proposal.

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