Penn National Gaming, Inc. announced June 15 it has entered into a definitive agreement to be acquired by certain funds managed by affiliates of Fortress Investment Group LLC and Centerbridge Partners LP in an all-cash transaction valued at approximately $8.9 billion, including the planned repayment of approximately $2.8 billion of Penn National's outstanding debt.
Under the terms of the agreement, Penn National shareholders will receive $67 in cash for each outstanding Penn National share. The purchase consideration represents a premium of approximately 31% over Penn National's closing share price on June 14. Penn National Gaming has approximately 85.5 million shares outstanding.
"Since the Company's 1994 initial public offering, Penn National Gaming has transformed itself from the owner of a single racetrack into one of the premier gaming companies in America,” said Peter M. Carlino, chief executive officer of Penn National, “This transaction will bring Penn National Gaming new owners who share our vision and support our long-term strategy of growth through continued capital investments in our existing properties through a de-centralized local management structure, employee training and advancement, internally initiated expansion and development opportunities and acquisitions.”
Several members of Penn National’s existing management team are expected to remain with the company, including Carlino; senior vice president and chief financial officer William J. Clifford, and executive vice president of operations Leonard M. DeAngelo, among others.
The merger agreement permits Penn National Gaming, with the assistance of its advisors, to solicit superior proposals from other parties for the 45-day period following the date the merger agreement was executed.
The transaction is expected to be completed in approximately 12 to 16 months, and is subject to shareholder approval, Federal Trade Commission approval and approvals from state gaming and racing authorities, as well as satisfaction of certain customary conditions.
About Penn National Gaming:
Penn National Gaming owns and operates casino and horse racing facilities , including Penn National in Pennsylvania, Charles Town in West Virginia, and Zia Park Racetrack in New Mexico, as well as three harness tracks. The Company presently operates 18 facilities in 14 jurisdictions including Colorado, Illinois, Indiana, Iowa, Louisiana, Maine, Mississippi, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, West Virginia, and Ontario. In aggregate, Penn National's operated facilities feature nearly 23,000 slot machines, more than 400 table games, approximately 1,731 hotel rooms and approximately 808,000 square feet of gaming floor space. In the latest 12-month period ended March 31, Penn National generated net revenues of approximately $2.3 billion.
About Fortress Investment Group LLC:
Fortress Investment Group LLC is a leading global alternative asset manager with approximately $36 billion in assets under management as of March 31. Fortress manages private equity funds, hedge funds and publicly-traded alternative investment vehicles. Fortress was founded in 1998, is headquartered in New York, and has affiliates with offices in Dallas, San Diego, Toronto, London, Rome, Frankfurt and Sydney.
About Centerbridge Partners LP:
Centerbridge is a $3.2 billion multi-strategy private investment fund. The firm is dedicated to partnering with world class management teams in a range of industry verticals. The limited partners of Centerbridge include many of the world's most prominent financial institutions, university endowments, pension funds, and charitable trusts.