Casino operator Penn National to buy Pinnacle in US$2.8 billion deal

Casino operator Penn National to buy Pinnacle in US$2.8 billion deal
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U.S. casino operator Penn National Gaming Inc said on Monday it would buy Pinnacle Entertainment Inc in a cash and stock deal valued at about US$2.8 billion to create a larger-scale gaming platform.

The deal is the latest in a series of mergers and acquisitions in the U.S. gambling sector in recent years as companies look to expand their reach, diversify their businesses and take advantage of recent legalization of gaming in some states.

In a bid to assuage regulatory concerns around the deal, Pinnacle will sell four of its Ameristar properties to Boyd Gaming Corp for US$575 million. At the same time, Boyd will sign a lease agreement with Gaming and Leisure Properties Inc , the landlord for Penn National and Pinnacle.

“This was a very complex four-party transaction and we took a look holistically at the deal and what we needed to handle regulatory (approval) at the state and federal level,” Penn National Chief Executive Timothy Wilmott said.

After the deal, Penn National will operate a combined 41 properties with about 53,500 slots, 1,300 tables and 8,300 hotel rooms in the United States.

Under the deal, Pinnacle’s shareholders will receive US$32.47 per share, comprising US$20.00 in cash and 0.42 shares of Penn National common stock.

The offer represents a premium of 36 percent for Pinnacle shareholders based on the closing price of the two stocks on Oct. 4, a day before the Wall Street Journal first reported that the companies were in merger talks.

Pinnacle’s shares were trading at US$31.03, below the offer price, while those of Penn National were down 3.6 percent at US$31.00.

 

h/t channelnewsasia.com

Started working in the Casino Industry in 1985, just never managed to leave as yet. Visited 99% of all UK Casinos, seen them all,

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