Harrah's Entertainment Inc. (HET) and Caesars Entertainment Inc. (CZR) on Monday said they have agreed to sell four casinos for $1.24 billion to privately held Colony Capital (search) in a deal aimed to cut antitrust concerns for Harrah's planned $5 billion takeover of Caesars.

Harrah's and Caesars will each sell two properties in the deal, which comes a month after talks were announced.

Harrah's said it expected no material after-tax gain or loss from the sale of its properties, and said it would use about $476 million in after-tax proceeds to pay down debt.

Caesars said it expected to report a gain and would use $480 million in after-tax proceeds from the sale of two properties to reduce its debt to around $3.7 billion.

Colony, which owns the Resorts casino in Atlantic City, N.J., and recently bought the Las Vegas Hilton (search) from Caesars, will purchase Harrah's East Chicago (search), Harrah's Tunica, in Mississippi. From Caesars it will buy the Atlantic City Hilton and Bally's Tunica, Mississippi.

Colony Capital, a Los Angeles-based private investment fund, has invested about $10.5 billion in about 7,500 assets over the past 13 years.

The purchase price of the four properties is about 8.5 times their trailing 12-month earnings before interest, tax, depreciation and amortization. The sale is not contingent on the closing of the Harrah's-Caesars deal.

Shares of Harrah's rose 36 cents, or 0.7 percent, to $52.50 in early afternoon trade. Shares of Caesars rose 2 cents to $16.53.