Penn National Gaming, Inc. (PENN: Nasdaq) (“Penn”) announced
today that it is commencing a cash tender offer for any and all of
the $300 million aggregate outstanding principal amount of its
5.875% senior notes due 2021 (CUSIP No. 707569 AR0).
The tender offer will expire at 5:00 p.m., New York City time,
on January 18, 2017, unless the tender offer is extended or earlier
terminated (such time and date, as they may be extended, the
“Expiration Date”). Under the terms and subject to the conditions
of the tender offer, holders of notes who validly tender (and do
not validly withdraw) their notes at or prior to the Expiration
Date (or who validly deliver a properly completed and duly executed
Notice of Guaranteed Delivery in accordance with the instructions
described in the Offer to Purchase at or prior to the Expiration
Date and subsequently deliver their tendered notes by the close of
business on January 20, 2017, the second business day after the
scheduled Expiration Date), and, in each case, whose tendered notes
are accepted for purchase by Penn in the tender offer, will receive
cash consideration of $1,045.45 per $1,000 principal amount of
tendered notes plus any accrued and unpaid interest from and
including the most recent interest payment date, up to, but
excluding, the settlement date for the tender offer. Tendered notes
may be validly withdrawn at any time at or prior to the Expiration
Date or as otherwise set forth in the Offer to Purchase for the
tender offer.
The settlement date in respect of notes that are validly
tendered at or prior to the Expiration Date and accepted by Penn
for purchase in the tender offer will be promptly after the
Expiration Date and is expected to be January 19, 2017, the first
business day following the scheduled Expiration Date. The
settlement date in respect of tendered notes with respect to which
a properly completed and duly executed Notice of Guaranteed
Delivery is validly delivered at or prior to the Expiration Date
(to the extent that such notes are not delivered at or prior to the
Expiration Date) that are accepted by Penn for purchase in the
tender offer is expected to be January 23, 2017, the third business
day following the scheduled Expiration Date.
The tender offer is being made pursuant to the Offer to Purchase
dated January 6, 2017, a related Letter of Transmittal and a
related Notice of Guaranteed Delivery (as they may be amended or
supplemented from time to time, the “Tender Offer Documents”),
which more fully set forth the terms and conditions of the tender
offer, and the information in this press release is qualified in
its entirety by such documents. See “Information Relating to the
Tender Offer” below.
In addition, Penn today delivered a conditional notice of
redemption with a redemption date of February 6, 2017, as it may be
extended pursuant to the indenture, for any and all notes
outstanding as of the redemption date. The redemption is
conditioned upon the satisfaction of the Financing Condition
described below and the other conditions set forth therein. It is
Penn’s current intention to effect the satisfaction and discharge
of the indenture governing the notes concurrently with or following
the settlement date and to redeem on the redemption date any notes
that are not tendered and accepted for purchase pursuant to the
tender offer, assuming the Financing Condition is satisfied. Any
redemption would be made solely pursuant to the notice of
redemption, including subject to the conditions set forth therein,
delivered pursuant to the indenture governing the notes and the
information in this press release is qualified in its entirety by
such notice.
The tender offer is being undertaken in connection with a
proposed refinancing by Penn of the notes as well as its existing
credit facilities. As part of that refinancing, Penn is seeking,
subject to market and other conditions, to (i) complete new
unsecured debt financing that would rank pari passu with the notes
in an aggregate amount sufficient to fund the cash consideration in
the tender offer together with accrued and unpaid interest in
respect of all of the outstanding notes (assuming that all
outstanding notes are tendered), and (ii) enter into amended senior
secured credit facilities, in an anticipated aggregate amount of
$1,500 million, expected to be comprised of a five-year $700
million revolving credit facility, a five-year $300 million term
loan A facility and a seven-year $500 million term loan B facility,
and to include, among other things, amendments to permit the new
unsecured debt financing and the purchase of all outstanding notes
pursuant to the tender offer and the redemption. Penn intends to
use the proceeds of the unsecured debt financing to fund the tender
offer, the satisfaction and discharge of the indenture governing
the notes, the redemption on the redemption date of any notes that
are not tendered and accepted for purchase pursuant to the tender
offer and related transaction fees and expenses. Penn intends to
use the portion of the revolving credit facility drawn or utilized
on the closing date of the refinancing, the term loan facilities,
any remaining net proceeds from the unsecured debt financing and
other cash on hand to refinance its existing credit facilities,
fund related transaction fees and expenses and for general
corporate purposes. Penn’s entering into the amended credit
facilities is subject to regulatory approvals and other customary
conditions, and Penn’s completion of the unsecured debt financing
also is subject to Penn’s entering into the amended credit
facilities and other customary conditions. We also may choose,
depending on market conditions, to allocate the respective dollar
amounts differently among the tranches of financing, including to
have a greater or lesser amount of the unsecured debt financing and
a correspondingly lesser or greater amount of term loan B
financing.
Each of the tender offer and the conditional redemption is
subject to the condition (the “Financing Condition”) that (i) Penn
has completed the unsecured debt financing transaction on terms
reasonably satisfactory to Penn resulting in net proceeds to Penn
that are sufficient to fund (a) the cash consideration in the
tender offer together with accrued and unpaid interest from and
including the most recent interest payment date and up to, but not
including, the settlement date for the tender offer, in respect of
all of the notes, (b) the satisfaction and discharge of the
indenture governing the notes and the related redemption with
respect to any notes not tendered and accepted for purchase
pursuant to the tender offer and (c) related transaction fees and
expenses, and (ii) Penn has entered into the amended credit
facilities on terms reasonably satisfactory to Penn, including
terms that permit the unsecured debt financing and the purchase of
all outstanding notes pursuant to the tender offer and the
redemption. The tender offer also is subject to other customary
conditions. However, there is no condition that a minimum principal
amount of notes be tendered in the tender offer.
If the Financing Condition or any of the conditions to the
tender offer is not satisfied, Penn is not obligated to accept for
payment, purchase or pay for, and may delay the acceptance for
payment of, any tendered notes and may terminate the tender offer.
Penn also reserves the right to extend the Expiration Date or to
otherwise withdraw and not complete the tender offer.
In addition, if the Financing Condition is not satisfied, Penn
is not obligated to redeem any of the notes and may revoke the
conditional redemption notice.
This press release is for informational purposes only and does
not constitute a notice of redemption under the optional redemption
provisions of the indenture governing the notes, nor does it
constitute an offer or solicitation to sell or buy any security. No
such offer or solicitation will be made in any jurisdiction in
which such offer or solicitation would be unlawful.
Information Relating to the Tender Offer
J.P. Morgan will act as Dealer Manager for the tender offer.
Questions regarding the terms of the tender offer may be directed
to J.P. Morgan, toll-free at (800) 245-8812. Ipreo, LLC will act as
the Information Agent for the tender offer. The Tender Offer
Documents may be obtained from Ipreo, LLC, free of charge, by
calling toll-free at (888) 593-9546 (bankers and brokers can call
collect at (212) 849-3880) or downloaded from
https://www.debtdomain.com/public/penn/index.html. The full details
of the tender offer, including complete instructions on how to
tender notes, are included in the Tender Offer Documents. Holders
are strongly encouraged to read carefully the Tender Offer
Documents, including materials incorporated by reference therein,
because they will contain important information.
None of Penn, its management or board of directors, the dealer
manager, the depositary, the information agent or the trustee with
respect to the notes or their respective affiliates makes any
recommendation to any holder as to whether to tender any notes in
connection with the tender offer, or has authorized any person to
give any information or to make any representation in connection
with the tender offer other than the information and
representations contained in this Tender Offer Documents. If anyone
makes any recommendation or representation or gives any such
information, you should not rely upon that recommendation,
information or representation as having been authorized by Penn,
its management or board of directors, the dealer manager, the
depositary, the information agent or the trustee with respect to
the notes. Each holder must make its own decision as to whether or
not to tender its notes and, if so, the principal amount of notes
to tender.
About Penn National Gaming
Penn is a leading, diversified, multi-jurisdictional owner and
manager of gaming and racing facilities and video gaming terminal
(“VGT”) operations. Penn has also recently expanded into social
online gaming offerings via its Penn Interactive Ventures, LLC
division and Penn’s recent acquisition of Rocket Speed, Inc.
(formerly known as Rocket Games, Inc., (“Rocket Speed”)). Penn
currently owns, manages, or has ownership interests in twenty-seven
facilities in the following seventeen jurisdictions: California,
Florida, Illinois, Indiana, Kansas, Maine, Massachusetts,
Mississippi, Missouri, Nevada, New Jersey, New Mexico, Ohio,
Pennsylvania, Texas, West Virginia, and Ontario, Canada.
Forward-Looking Statements
This press release and the documents referred to herein include
“forward looking statements,” including statements about the tender
offer and the conditional redemption, the satisfaction and
discharge of the indenture governing the notes and the anticipated
refinancing transactions. We can give no assurances that we will
enter into the amended credit facilities or complete the unsecured
debt financing in the respective amounts, on the proposed terms or
at all. 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
variation of these or similar words, or by discussions of future
events, strategies or risks and uncertainties. Actual results may
vary materially from expectations. Although Penn believes that its
expectations are based on reasonable assumptions, within the bounds
of its knowledge of its business, there can be no assurance that
actual results will not differ materially from Penn’s expectations,
and accordingly, Penn’s forward-looking statements are qualified in
their entirety by reference to the factors described in the Penn’s
Annual Report on Form 10-K for the year ended December 31, 2015,
subsequent Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K as filed with the Securities and Exchange Commission (the
“SEC”). Meaningful factors that could cause actual results to
differ materially from the forward-looking statements include,
without limitation, risks related to the following: the ability of
Penn’s operating teams to drive revenue and adjusted EBITDA
margins; the impact of significant competition from other gaming
and entertainment operations; Penn’s ability to obtain timely
regulatory approvals required to own, develop and/or operate its
facilities, or other delays, approvals or impediments to completing
its planned acquisitions or projects, such as construction factors,
including delays, unexpected remediation costs, local opposition,
organized labor, and increased cost of labor and materials; the
passage of state, federal or local legislation (including
referenda) that would expand, restrict, further tax, prevent or
negatively impact operations in or adjacent to the jurisdictions in
which Penn does or seeks to do business (such as a smoking ban at
any of its facilities); the effects of local and national economic,
credit, capital market, housing, and energy conditions on the
economy in general and on the gaming and lodging industries in
particular; the activities of Penn’s competitors and the rapid
emergence of new competitors (traditional, internet, social,
sweepstakes based and VGTs in bars, truck stops and other retail
establishments); increases in the effective rate of taxation at any
of Penn’s properties or at the corporate level; Penn’s ability to
identify attractive acquisition and development opportunities
(especially in new business lines) and to agree to terms with, and
maintain good relationships with partners/municipalities for such
transactions; the costs and risks involved in the pursuit of such
opportunities and Penn’s ability to complete the acquisition or
development of, and achieve the expected returns from, such
opportunities; Penn’s ability to maintain market share in
established markets and ramp up operations at its recently opened
facilities; Penn’s expectations for the continued availability and
cost of capital; the impact of weather; the outcome of pending
legal proceedings; changes in accounting standards; the risk of
failing to maintain the integrity of Penn’s information technology
infrastructure and safeguard its business, employee and customer
data; risks relating to the remediation of our material weaknesses
and the costs to strengthen Penn’s internal control structure;
Penn’s ability to generate sufficient future taxable income to
realize its deferred tax assets; with respect to the recently
opened Hollywood Casino Jamul-San Diego, particular risks
associated with the repayment or subordination of project loans,
sovereign immunity, local opposition (including several pending
lawsuits), access, regional competition and property performance;
with respect to Penn’s Plainridge Park Casino in Massachusetts, the
ultimate location and timing of the other gaming facilities in the
state and the region; with respect to Penn’s social and other
interactive gaming endeavors, including its recent acquisition of
Rocket Speed, risks related to the social gaming industry, employee
retention, cyber-security, data privacy, intellectual property and
legal and regulatory challenges, as well as Penn’s ability to
successfully develop innovative new games that attract and retain a
significant number of players in order to grow Penn’s revenues and
earnings; with respect to Illinois Gaming Investors, LLC, d/b/a
Prairie State Gaming, risks relating to recent acquisitions of
additional assets and the integration of such acquisitions, Penn’s
ability to successfully compete in the VGT market, its ability to
retain existing customers and secure new customers, risks relating
to municipal authorization of VGT operations and the implementation
and the ultimate success of the products and services being
offered; and other factors discussed in Penn’s filings with the
SEC. All subsequent written and oral forward looking statements
attributable to Penn or persons acting on Penn’s behalf are
expressly qualified in their entirety by the cautionary statements
included in this press release. Penn undertakes no obligation to
publicly update or revise any forward looking statements contained
or incorporated by reference herein, whether as a result of new
information, future events or otherwise, 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170106005377/en/
Penn National Gaming, Inc.William J. FairChief Financial
Officer610-373-2400orJCIRJoseph N. Jaffoni, Richard
Land212-835-8500penn@jcir.com
PENN Entertainment (NASDAQ:PENN)
Historical Stock Chart
From Mar 2024 to Apr 2024
PENN Entertainment (NASDAQ:PENN)
Historical Stock Chart
From Apr 2023 to Apr 2024