12/18/2017, 1:50 PM (Source: TeleTrader)
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Casino operator Penn to buy Pinnacle for $2.8bn

Penn National Gaming Inc. got a green light for its cash-and-share offer to purchase of Las Vegas–based rival Pinnacle Entertainment Inc. for an equivalent of $32.47 per share as of the last closing price, the two companies announced on Monday. The transaction worth $2.8 billion in total puts premium to unaffected valuations, from October 4, at 36%, according to the statement.

The company managing racetracks and casinos prepared $20 and 0.42 of own shares for each one in Pinnacle, and the boards estimated the deal may be executed in the second half of next year. The purchase, which includes the subsequent sale of the target entity's four units to Boyd Gaming Corp. for $575 million, will bring the combined number of properties in 20 jurisdictions to 41, according to provisions of the agreement. Penn calculated synergies will amount to $100 million in annual run-rate and be accretive in the first year.

The press release revealed Penn's spinoff Gaming and Leisure Properties Inc. real estate investment trust, agreed to mend master leases, sell and lease back two properties, and sign a contract with Boyd for Belterra Park in Ohio. Stockholders of Pinnacle are planned to hold 22% of the joint assets.

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