PNG Merger extends deadline in tender for Penn National's 6 7/8%, 6¾% notes

By Jennifer Chiou

New York, June 6 - PNG Merger Sub Inc. said it prolonged the deadline in its tender offer for Penn National Gaming, Inc.'s $200 million of 6 7/8% senior subordinated notes due 2011 and $250 million of 6¾% senior subordinated notes due 2015.

The tender offer now expires at 5 p.m. ET on June 13, extended from midnight ET on June 7.

As of 5 p.m. ET on June 6, holders had tendered for $199.96 million, or 99.98%, of the 6 7/8% notes and $249.608 million, or 99.84%, of the 6¾% notes.

By the consent deadline of 5 p.m. ET on May 22, holders had delivered consents and tenders for $199.955 million, or 99.98%, of the 6 7/8% notes and $249.353 million, or 99.74%, of the 6¾% notes, enough to amend the indentures.

Supplemental indentures have been executed and will go into effect when PNG buys the notes.

Pricing for the 6¾% notes is $1,093.73 per $1,000 principal amount, which includes the $20.00 per $1,000 consent payment.

Pricing for the 6 7/8% notes is $1,035.63 per $1,000 principal amount, again including the $20.00 consent payment.

PNG announced on May 12 it had begun a cash tender offer and consent solicitation for all the notes.

The offers are being held in connection with the previously announced acquisition of Penn National Gaming by affiliates of Fortress Investment Group LLC and Centerbridge Partners, LP. PNG Merger is a wholly owned subsidiary of PNG Acquisition Co. Inc., which is indirectly owned by Fortress and Centerbridge.

The offers are contingent on the receipt of tenders from holders of at least a majority of the outstanding notes and the completion of the merger.

The buyer also is soliciting consents to eliminate substantially all of the restrictive covenants and certain events of default in the respective indentures governing the notes.

Holders may not tender their notes without delivering consents or vice versa.

The total payment for the 6 7/8% notes was set at $1035.63 per $1,000 principal amount of the notes.

The 6¾% note tender is expected to price at 2 p.m. ET on May 22, or at least 10 business days before the expiration date.

For each $1,000 principal amount of the 6¾% notes, the payment will be sum of the present value on the payment date of the redemption price on the earliest redemption date for the 6¾% notes and the present value on the payment date of interest payments to the earliest redemption date, determined using a discount factor based on the yield on the pricing date of the reference security plus a fixed spread of 50 basis points.

The total payment for each series of notes includes a consent fee of $20.00 per $1,000 principal amount of notes tendered by the consent deadline. Holders will also receive accrued interest.

Global Bondholder Services Corp. (866 807-2200 or collect 212 430-3774) is the information agent. Deutsche Bank Securities Inc. (collect 212 250-7772) and Wachovia Securities (866 309-6316 or collect 704 715-8341) are the dealer managers and solicitation agents.

Penn National, located in Wyomissing, Pa., owns and operates casino and horse racing facilities.

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