Casino Operator Pinnacle Entertainment Sold For $2.8B

Pinnacle Entertainment is being snapped up by Penn National in a deal worth about $2.8 billion as the gaming industry seeks to diversify and cut costs at the same time. 

Karl Gehring / The Denver Post via Getty Images – Ameristar Black Hawk
Pinnacle Enteratinment destination in Colorado.

Penn National Gaming Inc. is spending $20 in cash for each share, and Pinnacle shareholders will also get 0.42 shares of Penn for each Pinnacle share they own. The stock-and-cash bid is worth an implied $32.47 per share, the companies said.

As part of the deal, Boyd Gaming Corp. is buying four of Penn National’s newly acquired properties.

Those include the Ameristar St. Charles and the Ameristar Kansas City, both in Missouri, as well as the Belterra Casino Resort in Florence, Indiana, and Belterra Park in Cincinnati. Boyd will pay $575 million for those assets.

Penn says the combined company will have 41 properties in North America, not including those acquired by Boyd. The company also expects about $100 million in annual cost savings as a result of the deal.

“The combined company will benefit from enhanced scale, additional growth opportunities and best-in-class operations, creating a more efficient integrated gaming company,” said Penn CEO Timothy J. Wilmott.

In morning trading, Pinnacle Entertainment shares added 32 cents to $31.27. Penn National shares dipped 32 cents to $29.37, and Boyd Gaming shares rose $1.46, or 4.5 percent, to $33.78.

Pollstar:

As concert venues, Pinnacle properties involved in the deal include the Ameristar Kansas City, which has hosted recent shows by Bret Michaels, America, Travis Tritt, Aaron Neville, and The Charlie Daniels Band. The Belterra Casino Resort in Indiana has Eli Young Band, Rick Springfield and Three Dog Night on the books for 2018.  River City Casino in St. Louis had Roger Hodgson, Clint Black, The Happy Together Tour with The Turtles Feat. Flo & Eddie, Ann Wilson, Todd Rundgren and others in 2017. 

Penn Gaming owns and operates properties including the Hollywood Casino near St. Louis, which just next door has the major concert venue Hollywood Casino Amphitheatre, a Live Nation venue. It was No. 13 on Pollstar’s 3Q Top 100 Amphitheatres chart for 2017, and upcoming shows include Kesha and Macklemore, Charlie Puth and Niall Horan.