GAMING AND LEISURE PROPERTIES ENTERS INTO AGREEMENTS WITH PENN NATIONAL GAMING
March 27 2020 - 5:15PM
Gaming and Leisure Properties, Inc. (NASDAQ: GLPI) (“GLPI” or “the
“Company”), today announced that it has reached agreements with
Penn National Gaming, Inc. (PENN: Nasdaq) (“Penn National”) wherein
the Company will acquire the real estate assets of the Tropicana
Las Vegas hotel and casino and the land for Penn National’s
Morgantown, Pennsylvania development in exchange for an aggregate
non-cash rent payment of $337.5 million. The parties will enter
into a lease for the Morgantown land which will generate $3 million
of initial annual cash rent for GLPI.
In addition, Penn National has agreed to engage
in an early renewal for both its master leases with GLPI, which
extends their current terms by five years, giving GLPI shareholders
enhanced visibility of future cash flows. Furthermore, Penn
National is granting GLPI downside protection for any future
competitive impact that Penn National’s new Category 4 developments
in Pennsylvania may have on the GLPI facilities subject to the Penn
National master lease. Penn National will otherwise make cash rent
payments for its obligations to GLPI including cash rent in April,
September, November, and December. Pursuant to the agreement, GLPI
has granted Penn National an option to acquire the operations of
Hollywood Casino Perryville, one of its taxable REIT subsidiary
(TRS) properties, subject to the execution of a lease agreement
with Penn National.
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 on the southern end of the Las Vegas Strip. Penn National
will continue to operate the Tropicana Las Vegas subject to a
cancelable lease with nominal rent whereby Penn National assumes
all carry costs for GLPI's benefit and will receive a share of the
net upside over a threshold to the extent a sale of the property
occurs within 24 months. GLPI plans to explore all options with
respect to the Tropicana Las Vegas to create and deliver value to
its shareholders.
GLPI's Chairman and Chief Executive Officer,
Peter Carlino, commented, “This is a win-win agreement that
significantly enhances GLPI’s certainty from the master leases with
Penn National as it assists Penn National in meeting its GLPI rent
obligations while helping to create a
stronger liquidity roadmap for Penn National. Given the rapid
onset of closures related to COVID-19, these agreements are
structured in a manner that allows both companies to achieve their
longer term objectives once the virus and its associated impacts
abate. For GLPI, we are receiving attractive real estate value
which represents a prudent and thoughtful approach toward ensuring
that our shareholders are made economically whole while positioning
Penn National with a healthier runway to navigate the
impacts of COVID-19 over the long term. These strategic
transactions strengthen the credit support behind GLPI's rent
payments, allows GLPI to control a unique and iconic site on the
Las Vegas Strip without carrying costs, offers unique protection to
the Penn National master lease from potential competitive pressure,
and enhances long term cash flow visibility though the lease
renewals. We believe the transactions announced today reflect the
strong working relationship and continued alignment of interests
between GLPI and Penn National as well as our commitment to enhance
long-term shareholder value.”
The planned transactions are subject to
negotiation of definitive agreements in the coming weeks and
receipt of necessary approvals. The parties plan to consummate the
transaction by April 30.
About Gaming and Leisure
PropertiesGLPI is engaged in the business of acquiring,
financing, and owning real estate property to be leased to gaming
operators in triple-net lease arrangements, pursuant to which the
tenant is responsible for all facility maintenance, insurance
required in connection with the leased properties and the business
conducted on the leased properties, taxes levied on or with respect
to the leased properties and all utilities and other services
necessary or appropriate for the leased properties and the business
conducted on the leased properties. GLPI expects to grow its
portfolio by pursuing opportunities to acquire additional gaming
facilities to lease to gaming operators. GLPI also intends to
diversify its portfolio over time, including by acquiring
properties outside the gaming industry to lease to third parties.
GLPI elected to be taxed as a REIT for United States federal income
tax purposes commencing with the 2014 taxable year and was the
first gaming-focused REIT in North America.
Forward-Looking StatementsThis
press release includes “forward-looking statements” within the
meaning of Section 27A of the Securities Act and
Section 21E of the Securities Exchange Act of 1934, as
amended, including our expectations regarding future acquisitions
and expected 2019 dividend payments. Forward-looking statements can
be identified by the use of forward-looking terminology such as
“expects,” “believes,” “estimates,” “intends,” “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. Such forward looking
statements are inherently subject to risks, uncertainties and
assumptions about GLPI and its subsidiaries, including risks
related to the following: the effect of pandemics such as COVID-19
on the business operations of GLPI’s tenants and their continued
ability to pay rent in a timely manner or at all; GLPI’s ability to
successfully consummate the announced transactions with Penn
National, including the ability of the parties to satisfy the
various conditions to closing, including receipt of all required
regulatory approvals, or other delays or impediments to completing
the proposed transactions; the availability of and the ability to
identify suitable and attractive acquisition and development
opportunities and the ability to acquire and lease those properties
on favorable terms; the ability to receive, or delays in obtaining,
the regulatory approvals required to own and/or operate its
properties, or other delays or impediments to completing
acquisitions or projects; GLPI's ability to maintain its status as
a REIT; our ability to access capital through debt and equity
markets in amounts and at rates and costs acceptable to GLPI; the
impact of our substantial indebtedness on our future operations;
changes in the U.S. tax law and other state, federal or local laws,
whether or not specific to REITs or to the gaming or lodging
industries; and other factors described in GLPI’s Annual Report on
Form 10-K for the year ended December 31, 2019, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K, each as
filed with the Securities and Exchange Commission. All subsequent
written and oral forward-looking statements attributable to GLPI or
persons acting on GLPI’s behalf are expressly qualified in their
entirety by the cautionary statements included in this press
release. GLPI 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.
Contact |
|
Investor
Relations – Gaming and Leisure Properties, Inc. |
Steven T. Snyder |
Joseph Jaffoni, Richard Land,
James Leahy |
610/378-8215 |
212/835-8500 |
investorinquiries@glpropinc.com |
glpi@jcir.com |
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