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In a deal worth about $2.8 billion, Penn National has acquired Pinnacle Entertainment. The casino operator seeks diversification and cost cutting from the acquisition. The deal also means that Penn is now the third largest American casino operator after MGM Resorts International and Caesars.
According to the company statement, Pen national is spending $20 in cash for each share, while Pinnacle shareholders would get 0.42 shares of Penn for every Pinnacle share owned. The stock-and-cash bid is calculated as $32.47 per share.
Boyd Gaming Corporation gets four of Penn National’s newly acquired properties as part of the deal for $575 million. These properties are Missouri’s Ameristar St. Charles and the Ameristar Kansas City; Belterra Park in Cincinnati; and Belterra Casino Resort in Florence, Indiana.
According to the official statement by Penn, the company will operate on 41 properties in North America, excluding the ones acquired by Boyd. The group is expecting about $100 million in annual cost savings from the deal.
Penn CEO Timothy J. Wilmott said that the deal will help combined company from perspective of enhanced scale, growth opportunities and best-in-class operations. The amalgamation is an impetus for an efficient integrated gaming company.
After the acquisition, Pinnacle Entertainment shares saw an increase by 32 cents to $31.27 while Penn National shares went down by 32 cents to $29.37. Boyd Gaming shares registered gains by $1.46 to get to $33.78.
The Pennsylvania-based Penn National owns the Tropicana on the Las Vegas Strip and M Resort in Henderson in the Nevada state. Penn has gaming, racing facilities and video gaming terminal operations in United States of America and Canada. The group has last forayed into social online gaming through Penn Interactive Ventures, LLC division and Rocket Speed Inc.
As of March 2017, Penn operated twenty-seven facilities in seventeen jurisdictions which are Nevada, Florida, New Jersey, Kansas, Mississippi, Pennsylvania, California, Illinois, Indiana, Maine, Massachusetts, Missouri, New Mexico, Ohio, Texas, West Virginia and Ontario, Canada. Penn National Gaming operates approximately 35,000 gaming machines, 800 table games and 4,600 hotel rooms.