updated 12/15/2006 11:07:14 AM ET 2006-12-15T16:07:14

Shares of casino giant Harrah's Entertainment Inc. rose in Friday premarket trading after fellow casino operator Penn National Gaming Inc. offered a bid for Harrah's, the Wall Street Journal said Friday, citing sources close to the matter.

Penn's emergence as a suitor boosts the competition since Harrah's has also been mulling offers from private equity firms Apollo Management Group and Texas Pacific Group to take the company private for more than $83.50 per share, or more than $15.5 billion.

Another option on the table earlier was a plan to recapitalize the company by borrowing money to give shareholders a large dividend or to repurchase shares to boost shareholder value.

The exact terms of the Penn offer were not disclosed, but a source described the offer as mostly cash and would combine Wyomissing, Pa.-based Penn and Harrah's shares into one company with substantial debt holdings of its own, the WSJ said.

Harrah's is the world's largest casino company by revenue, operating 39 casinos nationwide, including Caesars Palace, Bally's and Paris in Las Vegas, and Caesars and Harrah's in Atlantic City, N.J.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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