In the wake of Hurricane Katrina, the Mississippi Gulf Coast casino industry is to be the target of investment by some major US corporations.

Harrah’s Entertainment has announced that it has signed a letter of intent to acquire Casino Magic Biloxi, Mississippi, from Pinnacle Entertainment.

Meanwhile, Harrah’s will sell two of its subsidiaries in Lake Charles, Louisiana, to Pinnacle.

Anthony Sanfilippo, president of Harrah’s Central Division, said: “As we are focusing our Gulf Coast development efforts on Biloxi and New Orleans, we felt it made sense to sell Harrah’s Lake Charles.”

The company will also be re-opening its Grand Casino Biloxi this summer with a redesigned 500-room hotel, 35,000sq ft (3,250sq m) casino, and 16,000sq ft (1,500sq m) spa.

Leucadia National Corporation, a New York-based holding company, will be ‘indirectly acquiring’ ownership in the Hard Rock Biloxi casino resort for US$89m (£50m, 72m euro), and has offered to buy US$160m (£89m, 130m euro) in bond debt owed.

Hard Rock Biloxi’s parent company, Premier Entertainment, is currently owned by GAR and AA Capital. Luecadia will be funding GAR’s buyout of AA Capital, and will place new members on the board of directors, as well as have control of the board.

The Hard Rock sale is expected to take place on or before May 4, subject to a decision by the Mississippi Gaming Commission.