Gaming and Leisure Properties, Inc. Announces Sale and Lease Transactions
December 15 2020 - 7:00AM
Gaming and Leisure Properties, Inc. (the "Company" or "GLPI")
(NASDAQ: GLPI), announced today that the Company has entered into a
definitive agreement with Penn National Gaming, Inc. (NASDAQ: PENN)
(“Penn National” or the “Company”) to sell to Penn National the
operations of Hollywood Casino Perryville in Maryland for $31.1
million in cash, subject to certain customary working capital
adjustments. Simultaneous with the closing of the transaction, GLPI
will enter into a new lease with Penn National for the real estate
assets associated with Hollywood Casino Perryville, for initial
annual cash rent of approximately $7.77 million. The lease will
have an initial term of 15 years with four 5-year extensions.
GLPI has also entered into a definitive
agreement to sell the operations of Hollywood Casino Baton Rouge
(“HCBR”) to Casino Queen Holding Company Inc. (“Casino Queen”) for
$28.2 million. GLPI will retain ownership of all real estate assets
at HCBR and will simultaneously enter into a master lease with
Casino Queen, which will include both the DraftKings at Casino
Queen (“DKCQ”) property in East St. Louis and the HCBR facility,
for initial annual cash rent of approximately $21.4 million. The
lease will have an initial term of 15 years with four 5-year
extensions.
In conjunction with the transaction, GLPI will
also have a right of first refusal with Casino Queen for other sale
leaseback transactions up to $50 million over the next 2 years.
GLPI will complete the previously announced landside development
project at HCBR and the rent under the master lease will be
adjusted upon delivery to reflect a yield of 8.25% on GLPI’s
project costs.
Peter Carlino, Chairman and Chief Executive
Officer of GLPI, commented, "The sale of our operations in Baton
Rouge and Perryville is bittersweet as both properties were
foundational to the creation of GLPI seven years ago. We are
grateful to the team members who do an amazing job managing these
properties and delivering great guest entertainment and amenities,
particularly in the face of the challenges brought on by the
pandemic. We are confident that they are in good hands with the new
operators of these properties and will continue to shine under Penn
National and Casino Queen. By retaining the real estate of both
Perryville and Baton Rouge, and continuing the development on the
expansion in Baton Rouge, we retain a vested interested in their
future. Finally, while we have decided to divest these operations
to focus on our core business, our institutional knowledge and
ability to operate gaming facilities at a high level remain intact
should a compelling opportunity arise in the future.”
Terry Downey, President and Chief
Executive Officer of Casino Queen commented further, “Casino Queen
is pleased to be working with GLPI on this transaction. This gives
us the opportunity to expand our regional footprint into the Baton
Rouge area, a market which we are very excited about. We feel that
with sports betting coming on, along with traditional gaming,
we have a lot to offer to our valued customers.”
Both transactions are expected to close in the
second half of 2021, subject to regulatory approvals and other
customary closing conditions.
Penn National Gaming is the nation's largest and
most diversified regional gaming operator with 41 properties across
19 states (including the Perryville property). Penn National’s
properties feature approximately 50,000 gaming machines, 1,300
table games and 8,800 hotel rooms, and operate under various
well-known brands, including Hollywood, Ameristar, and
L'Auberge.
Casino Queen is a regional gaming company owned
by Standard General that owns or is under contract to buy four
casinos across three states and is focused on further expanding its
casino and sports betting operations.
About Gaming and Leisure
Properties
GLPI 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 elected to be taxed as a
real estate investment trust (“REIT”) for U.S. federal income tax
purposes commencing with the 2014 taxable year and was the first
gaming-focused REIT in North America.
Forward-Looking Statements
This 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 expectations regarding our
receipt of deferred rent and loan satisfaction from Casino Queen,
as well as our ability to complete the sale of the operations of
Hollywood Casino Perryville and Hollywood Casino Baton Rouge and
related 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: GLPI’s ability to successfully consummate the Hollywood
Casino Perryville and Hollywood Casino Baton Rouge divestitures and
related transactions, including the ability of the parties to
satisfy various closing conditions, receipt of required regulatory
approvals, or other delays or impediments to completing the
proposed transactions; GLPI’s ability to collect deferred rent and
the loan repayment obligations from Casino Queen; GLPI’s ability to
maintain its status as a REIT; 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 SEC. 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. |
Investor Relations |
Matthew Demchyk, SVP Investments |
Joseph Jaffoni, Richard Land, James Leahy at JCIR |
610/378-8232 |
212/835-8500 |
investorinquiries@glpropinc.com |
glpi@jcir.com |
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