GLPI Expands Relationship with Bally’s Through Strategic Transactions
April 13 2021 - 7:29AM
Gaming and Leisure Properties, Inc. (NASDAQ: GLPI) (“GLPI” or “the
Company”) announced today that it entered into a binding term sheet
with Bally’s Corporation (NYSE: BALY) (“Bally’s”) to acquire the
real estate assets of Bally’s casino property in Black Hawk, CO and
the property it plans to acquire in Rock Island, IL, in a
transaction which is subject to regulatory approval and expected to
close later this year. Total consideration for the acquisition is
$150 million. The parties expect to add the properties to the
master lease they are entering into in connection with Bally’s
previously announced acquisitions of Tropicana Evansville and Dover
Downs Hotel & Casino ("GLPI-BALY master lease”) which will
generate incremental rent of $12.0 million. Normalized rent
coverage on the assets is expected to be 2.25x in the first
calendar year post-acquisition. The acquisitions of the real estate
assets of Bally’s properties in Rock Island and Black Hawk are
expected to close in early 2022.
In addition, Bally’s has granted GLPI a right of
first refusal to fund the real property acquisition or development
project costs associated with any and all potential future
transactions in Michigan, Maryland, New York and Virginia through
one or more sale-leaseback or similar transactions for a term of
seven years.
Bally’s also plans to acquire both GLPI’s
non-land real estate assets and Penn National Gaming, Inc.’s
(NASDAQ: PENN) (“Penn National”) outstanding equity interests in
Tropicana Las Vegas Hotel and Casino, Inc. for an aggregate cash
acquisition price of $150 million. GLPI will retain ownership of
the land and will concurrently enter into a 50-year ground lease
with initial annual rent of $10.5 million. The ground lease will be
supported by a Bally’s corporate guarantee and cross-defaulted with
the GLPI-BALY master lease. This transaction is expected to close
in early 2022.
Both GLPI and Bally’s have committed to a
structure in which GLPI has the potential to acquire additional
assets in sale-leaseback transactions to the extent Bally’s elects
to utilize GLPI’s capital as a funding source for their proposed
acquisition of Gamesys Group plc. The $500 million commitment
provides Bally’s an alternative financing commitment which at
GLPI’s sole discretion may be funded in the form of equity,
additional prepaid sale-leaseback transactions or secured
loans.
Peter Carlino, Chairman and CEO of GLPI,
commented, “We are delighted to expand our relationship with
Bally’s through a complex transaction that is a win-win for both
companies. With strong rent coverage and an accretive cap rate, the
transaction again expands and diversifies our master lease through
the addition of Bally’s properties in Rock Island, IL and Black
Hawk, CO. We are also excited to have secured rights of first
refusal on potential future assets. Furthermore, our conversion of
the Tropicana into an income producing ground lease solidifies the
value creation that we hoped for in originally structuring the
transaction with Penn National.”
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.
Forward-Looking StatementsThis
press release includes “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
including our ability to receive the necessary approvals and
satisfy conditions precedent necessary to close the announced
transactions. 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 the novel coronavirus (COVID-19), on GLPI as
a result of the impact of such pandemics 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 Bally's, 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; 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, 2020,
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 as presented or at
all.
Contact:Gaming and Leisure Properties, Inc.Matthew
Demchyk, Chief Investment
Officer610/401-2900investorinquiries@glpropinc.com |
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Investor RelationsJoseph
Jaffoni, Richard Land, James Leahy at
JCIR212/835-8500glpi@jcir.com |
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