Acquisition of Iconic Las Vegas Strip
Property Scheduled to Close on August 25
Penn National Gaming, Inc. (PENN: Nasdaq) (“the Company,” or
“Penn National”) announced that it received approval today from the
Nevada Gaming Commission (“NGC”) to complete the Company’s planned
$360 million acquisition of Tropicana Las Vegas. The NGC’s approval
represents the final step in the regulatory process to finance and
acquire the property following earlier approvals in several other
jurisdictions where the Company operates. Penn National plans to
complete the purchase of Tropicana Las Vegas on August 25,
2015.
“The addition of Tropicana Las Vegas to our national portfolio
of gaming assets is an exciting and important milestone for Penn
National as it fulfills our longstanding strategic objective to
acquire the right resort at the right price on the Las Vegas Strip.
Tropicana Las Vegas will allow us to leverage our database of
nearly 3 million active regional gaming customers while further
diversifying our operations with another wholly-owned asset,” said
Timothy Wilmott, Chief Executive Officer of Penn National Gaming.
“Our regional gaming customers have long asked us to offer them an
attractive destination on the Las Vegas Strip. After our
disciplined search, we believe the iconic Tropicana Las Vegas will
successfully address customer demand for a Strip property while
enhancing our already strong competitive position in the local
markets where we operate. Furthermore, the Tropicana Las Vegas is
ideally suited to benefit from significant investment at adjacent
gaming properties which is expected to generate additional traffic
in the area.”
Tropicana Las Vegas is situated on a 35-acre land parcel at the
corner of Tropicana Boulevard and Las Vegas Boulevard,
approximately 2.5 miles from McCarran International Airport at the
southern end of the Las Vegas Strip. The property has undergone
over $200 million of upgrades over the past four years, including
renovations of all its nearly 1,500 guest rooms. Other amenities
include a 50,000 square foot casino with over 1,000 gaming
positions, a sports book, three full service restaurants, a food
court, a 1,200-seat performance theater, the 300 seat Laugh Factory
comedy club, over 100,000 square feet of exhibition and meeting
space, and a five-acre tropical beach event area and spa.
As previously announced, Penn National has developed a two-phase
plan to realize the full value of the transaction, which it expects
to implement over the next three to five years. In the first phase,
scheduled to occur over the next 6-9 months, the Company will
invest approximately $20 million in further facility improvements
and integration activities. These will include upgrading the
property’s existing technology infrastructure to allow for the
integration of Penn National’s nationwide player loyalty program,
Marquee Rewards, at Tropicana Las Vegas, with the goal of launching
the program in the second quarter of 2016. In the second phase, the
Company plans to evaluate other potential facility enhancements at
the property, such as the addition of retail space, food and
beverage outlets, casino floor improvements and potentially
additional hotel rooms. The scope, budget and timing of any such
expansion and improvements will be determined based upon Penn
National’s operation of the property and customer demand for
additional amenities.
In June, Penn National named Bob Sheldon to the newly created
role of President of Las Vegas Operations, subject to customary
regulatory approvals. In this role, Mr. Sheldon has direct
oversight of all aspects of the operations of both Tropicana Las
Vegas and M Resort Spa Casino in Henderson, NV and is responsible
for building a strong local leadership team that will implement the
Company’s operating, guest service and growth strategies at
Tropicana. Reporting to Mr. Sheldon at Tropicana will be General
Manager Philippe Khouri, who most recently served as General
Manager of the Company’s Argosy Alton property. Mr. Khouri will
assume his role effective immediately.
Mr. Wilmott concluded, “We believe the addition of Tropicana Las
Vegas to our regional gaming property portfolio will enable us to
drive significant long-term shareholder value. We look forward to
closing on the acquisition next week and, as our capital spending
programs are implemented, welcoming our guests from across the
country to the Las Vegas Strip.”
About Penn National Gaming
Penn National Gaming owns, operates or has ownership interests
in gaming and racing facilities with a focus on slot machine
entertainment. At June 30, 2015, the Company operated twenty-six
facilities in seventeen jurisdictions, including Florida, Illinois,
Indiana, Kansas, Maine, Massachusetts, Maryland, Mississippi,
Missouri, Nevada, New Jersey, New Mexico, Ohio, Pennsylvania,
Texas, West Virginia, and Ontario. At June 30, 2015, in aggregate,
Penn National Gaming’s operated facilities featured approximately
32,000 gaming machines, 760 table games and 3,100 hotel rooms.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements can be identified by the use of forward
looking terminology such as “expects,” “believes,” “estimates,”
“projects,” “intends,” “plans,” “seeks,” “may,” “will,” “should” or
“anticipates” or the negative or other variations of these or
similar words, or by discussions of future events, strategies or
risks and uncertainties, including future plans, strategies,
performance, developments, acquisitions, capital expenditures, and
operating results. Actual results may vary materially from
expectations. These forward looking statements are inherently
subject to risks, uncertainties and assumptions about Penn National
Gaming and its subsidiaries, including risks related to the
occurrence and the timing of the closing, the closing of related
financing and higher leverage, the successful integration of the
acquisition, our ability to successfully leverage our player
database, market conditions affecting the Las Vegas Strip and
regional gaming, costs relating to ongoing litigation in which
Tropicana Las Vegas is involved, labor relations, the impact of
future capital expenditures, the risks associated with construction
projects (such as delays and unexpected costs) and the availability
and cost of capital and accordingly, any forward looking statements
are qualified in their entirety by reference to the factors
discussed in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2014, as well as any subsequent Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K, each as filed
with the United States Securities and Exchange Commission. The
Company does not intend to update publicly any forward-looking
statements except as required by law. In light of these risks,
uncertainties and assumptions, the forward-looking events discussed
in this press release may not occur.
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version on businesswire.com: http://www.businesswire.com/news/home/20150820006128/en/
Penn National Gaming, Inc.Saul V. Reibstein, 610-373-2400Chief
Financial OfficerorJCIRJoseph N. Jaffoni / Richard Land,
212-835-8500penn@jcir.com
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