WYOMISSING, PA—Weeks after rumors surfaced on discussions between Penn National Gaming Inc. and Pinnacle Entertainment Inc., the two casino operators confirmed Monday that they plan to merge. Penn National has agreed to acquire Pinnacle in a cash-and-stock transaction that's valued at approximately $2.8 billion and which is expected to close in the second half of 2018.
In connection with the merger, Boyd Gaming Corp. has agreed to acquire four Pinnacle properties for a total of $575 million in cash: Ameristar Kansas City and Ameristar St. Charles in Missouri; Belterra Casino Resort in Indiana; and Belterra Park in Ohio. The divestitures are expected to occur immediately prior to the closing of Penn National's Pinnacle acquisition.
“By combining our highly complementary portfolios and similar operating philosophies, we will be able to leverage the strengths of both our companies and create an unparalleled experience for our regional gaming customers, while generating significant value for our shareholders and business partners,” says Penn National CEO Timothy J. Wilmott. “The combined company will benefit from enhanced scale, additional growth opportunities and best-in-class operations, creating a more efficient integrated gaming company.”
Once the Pinnacle acquisition—and divestiture of four assets—is completed, Penn National will operate 41 properties across 20 jurisdictions with approximately 53,500 slots, 1,300 tables and 8,300 hotel rooms. Gaming and Leisure Properties Inc., the landlord for Penn National and Pinnacle under their respective master lease agreements, will acquire the real estate associated with Belterra Park and with Plainridge Park Casino in Massachusetts in a $315-million sale-leaseback.
Penn National has received committed financing for the transaction from BofA Merrill Lynch and Goldman Sachs Bank USA, and expects to fund the acquisition with a combination of the proceeds from the Boyd and GLPI transactions, existing cash on its balance sheet and new debt financing. The deal is contingent on the approval of shareholders for both Penn National and Pinnacle.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
