Penn National Gaming extends tender offer for Argosy's 7%, 9% notes

By Jennifer Chiou

New York, Aug. 9 - Penn National Gaming, Inc. said it again extended the tender offer for Argosy Gaming Co.'s $200 million 9% senior subordinated notes due 2011 and $300 million 7% senior subordinated notes due 2014 to midnight ET on Aug. 26, unless extended, from midnight ET on Aug. 23.

The price determination date has again been extended to 2 p.m. ET on Aug. 12 from 2 p.m. ET on Aug. 9.

Penn's wholly owned subsidiary Thoroughbred Acquisition Corp. began the offer on July 21 for Penn's pending acquisition of Argosy.

For each $1,000 principal amount in notes, Thoroughbred will pay a total based on the notes' redemption price on their first call date plus interest payments up to the call date, discounted using the bid-side yield on a reference Treasury plus 50 basis points. From that total, accrued interest up to buy excluding the payment date is subtracted. The total amount includes a $10.00 per $1,000 consent payment.

For the 9% notes, the call price is $1,045 per $1,000 principal amount and the reference Treasury is the 2.375% note due Aug. 31, 2006.

For the 7% notes, the call price is $1,035 per $1,000 principal amount and the reference Treasury is the 3.25% note due Jan. 15, 2009.

Those who tender their holdings after the consent deadline will not receive the $10.00 per $1,000 principal amount consent payment.

The consent deadline was at 5 p.m. ET on Aug. 3.

As already reported, the acquisition, which is expected to close in August, is conditioned upon gaming approvals in Illinois, Louisiana and Missouri as well as the approval of the Federal Trade Commission.

On Aug. 4, Penn announced it received the necessary consents from noteholders for amendments and waivers to the notes' indentures.

Deutsche Bank Securities Inc. (800 553-2826) is dealer manager and solicitation agent and Mackenzie Partners, Inc. (800 322-2885) is information agent.

Wyomissing, Pa.-based Penn National Gaming owns and operates casino and horse racing facilities.

As already announced, Thoroughbred intends to finance the offers with part of the proceeds from Penn National's planned new $2.725 billion of senior secured credit facilities.

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