Recently Renovated Iconic Asset Establishes
Attractive Las Vegas Strip Destination for Penn National’s Regional
Gaming Customers
Penn National Gaming, Inc. (PENN: Nasdaq) (“the Company,” “Penn
National,” or “Penn National Gaming”) announced today that it
entered into a definitive agreement to acquire Tropicana Las Vegas
Casino Hotel Resort (“Tropicana Las Vegas” or “Tropicana”) from its
shareholders, the largest of which is a partnership between Onex
and Alex Yemenidjian, for $360 million. Penn National intends to
fund the acquisition through an expansion of its existing credit
facilities and cash on hand.
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. The iconic property features
nearly 1,500 guest rooms including 181 suites (of which six are
luxury villas). Amenities at the property 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, a five-acre tropical
beach event area and spa.
Over the past four years, Tropicana Las Vegas completed over
$200 million of property upgrades including a complete renovation
of all guest rooms, which feature a new South Beach theme. In
addition, significant improvements were made to the ballroom,
conference meeting space and Pavilion exhibition space, the 1,200
seat showcase performance theater, restaurant and entertainment
areas, and the facility’s infrastructure and mechanical systems. In
the Las Vegas Review Journal’s 2015 Best of Las Vegas survey,
Tropicana Las Vegas garnered awards in several categories including
Best Hotel Rooms, Best Hotel Suites and Best Hotel Room Value.
Timothy Wilmott, Chief Executive Officer of Penn National
Gaming, commented, “The planned acquisition of Tropicana Las Vegas
establishes a strong presence on the Las Vegas Strip for Penn
National Gaming, fulfilling an important long-term strategic
objective for the Company. With a $360 million acquisition cost, we
believe we have structured a prudent transaction to own and operate
a premier Strip asset at an attractive price of entry. Tropicana
Las Vegas is positioned to benefit from recent significant capital
expenditures and includes 35 acres of land on one of the busiest
and most famous intersections in Las Vegas. The property will also
benefit from its proximity to the new 20,000-seat capacity MGM -
AEG Arena scheduled to open in mid-2016.
“Given our goal of leveraging Penn National’s database of nearly
3 million active regional gaming customers, we have spent the past
several years reviewing an acquisition of numerous gaming assets in
Las Vegas. The Tropicana is a quality facility that can serve as an
attractive destination offering for current Penn National
customers, which further enhances our strong competitive position
in the regional gaming markets in which we operate across the
United States. At the same time, we view this transaction as a
strategic opportunity to create value for our shareholders by
adhering to our focus on operating disciplines and careful
deployment of our capital. The planned acquisition will also
further diversify our property portfolio with another wholly-owned
and operated asset.
“Penn National has developed a two-phase plan to realize the
full value of this transaction which we expect to occur over the
next three to five years. In the first phase, we intend to invest
approximately $20 million in facility improvements and integration
activities. The integration activities will include the utilization
of Penn National’s nationwide database to drive increased
visitation and yield, and the upgrade of existing technology
infrastructure to integrate Tropicana’s systems with Penn
National’s existing systems with the goal of launching Penn
National’s nationwide player loyalty program, Marquee Rewards, at
Tropicana Las Vegas. In the second phase, we intend 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 initial operation of the
property and customer demand for additional amenities.”
Mr. Wilmott concluded, “With our proven management team,
operating discipline and return-focused approach to capital
expenditures, we believe the Tropicana offers a meaningful
opportunity for Penn National, our regional gaming customers and
our shareholders.”
The transaction and credit facility expansions are subject to
regulatory approvals, the expiration of the applicable
Hart-Scott-Rodino waiting period and other customary closing
conditions and the transaction is expected to be completed by
year-end 2015.
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 March 31, 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 March 31, 2015, in aggregate,
Penn National Gaming’s operated facilities featured approximately
31,000 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 required regulatory approvals and other conditions to closing,
higher leverage, the successful integration of the acquisition, our
ability to successfully leverage our player database, market
conditions affecting the Las Vegas Strip, ongoing litigation, labor
relations , 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.
Penn National Gaming, Inc.Saul V. Reibstein, 610-373-2400Chief
Financial OfficerorJCIRJoseph 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
