By Lisa Kerner
Charlotte, N.C., June 15 - Penn National Gaming, Inc. agreed to be acquired by affiliates of Fortress Investment Group LLC and Centerbridge Partners LP in an all-cash transaction valued at roughly $8.9 billion, including the repayment of some $2.8 billion of Penn National's outstanding debt.
Under the terms of a definitive merger agreement, Penn National shareholders will receive $67.00 in cash for each outstanding Penn National share, a 31% premium to Penn National's closing price on June 14.
The agreement also includes a $200 million termination fee and a 45-day go-shop period in which Penn National may solicit superior proposals.
There are no financing conditions; however, if the merger is not closed by June 15, 2008, the per-share price will be increased by $0.0149 per day. The transaction is expected to be completed in 12 to 16 months.
Penn National's board is recommending that its shareholders adopt and approve the merger agreement.
"This is a very attractive valuation for our shareholders, at a time when the financial markets are recognizing the strong investment rationale for gaming companies," Penn National chief executive officer Peter M. Carlino said in a company news release.
Carlino, chief financial officer William J. Clifford, executive vice president of operations Leonard M. DeAngelo and other members of Penn National's corporate management team are expected to remain with the company.
Penn National, located in Wyomissing, Pa., owns and operates casino and horse racing facilities.
| Acquirers: | Fortress Investment Group LLC and Centerbridge Partners LP
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| Target: | Penn National Gaming, Inc.
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| Price per share: | $67.00
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| Termination fee: | $200 million
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| Announcement date: | June 4
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| Expected closing: | In 12 to 18 months
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| Stock price for target: | Nasdaq: PENN: $51.14 on June 14
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