Penn National Gaming, Inc. (PENN: Nasdaq) (“Penn National” or
the “Company”) today announced that the underwriters of the
Company’s recently completed public offering of common stock, par
value $0.01 per share (the “Common Stock”) and 2.75% Convertible
Senior Notes due 2026 (the “Convertible Notes”) have exercised
their options to acquire additional shares of Common Stock and
Convertible Notes, together valued at approximately $75 million.
Combined with the previously announced public offering, this amount
equates to an approximately $675 million dollar capital raise and
is the first ever U.S. dual tranche equity/convert offering for a
gaming operator.
As a result of the option exercises, together with the
16,666,667 shares of Common Stock and the $300 million aggregate
principal amount of Convertible Notes previously issued in the
underwritten public offering on May 14, 2020, the Company has now
completed the issuance in the offering of a total of (i) 19,166,667
aggregate shares of Common Stock, at a price to the public of
$18.00 per share, for gross proceeds of approximately $345 million
and (ii) $330,495,000 aggregate principal amount of Convertible
Notes.
As previously disclosed, the Company expects to use the net
proceeds from the offering for general corporate purposes that will
significantly enhance its liquidity while providing the Company
with the flexibility to invest in its unique omni-channel growth
strategy, powered by its partnership with Barstool Sports.
Goldman Sachs & Co. LLC and BofA Securities acted as joint
book-running managers and representatives of the underwriters, and
J.P. Morgan, Fifth Third Securities and Wells Fargo Securities also
served as book-running managers for the offering of Common Stock
(the “Common Stock Offering”) and the offering of Convertible Notes
(the “Convertible Notes Offering). Barclays, BTIG, Citizens Capital
Markets, Macquarie Capital, Morgan Stanley, Stifel, SunTrust
Robinson Humphrey and TD Securities acted as co-managers for the
Common Stock Offering. Barclays, Citizens Capital Markets,
Macquarie Capital, Morgan Stanley, Stifel, SunTrust Robinson
Humphrey, TD Securities and US Bancorp acted as co-managers for the
Convertible Notes Offering. A shelf registration statement relating
to these securities has been filed with the U.S. Securities and
Exchange Commission (“SEC”) and has become effective. Each of the
Common Stock Offering and the Convertible Notes Offering were made
by means of a prospectus supplement and an accompanying base
prospectus. The preliminary and final prospectus supplements and
accompanying base prospectus relating to each of the Common Stock
Offering and the Convertible Notes Offering were filed with the SEC
and are available on the SEC’s website at www.sec.gov. Copies of
the preliminary and final prospectus supplements and accompanying
base prospectus relating to the Common Stock Offering and the
Convertible Notes Offering may be obtained from Goldman Sachs &
Co. LLC, 200 West Street, New York, New York 10282, Attention:
Prospectus Department, by telephone at (866) 471-2526, or by email
at prospectus-ny@ny.email.gs.com or BofA Securities, NC1-004-03-43,
200 North College Street, 3rd floor, Charlotte NC 28255-0001,
Attention: Prospectus Department, or via email:
dg.prospectus_requests@bofa.com.
This press release does not constitute an offer to sell, or the
solicitation of an offer to buy, any share of common stock, any
Convertible Notes or any other security and shall not constitute
any offer, solicitation or sale in any jurisdiction in which such
offer, solicitation, purchase or sale is unlawful. Before
investing, please read the applicable prospectus supplement and
accompanying base prospectus and other documents Penn National has
filed with the SEC for more complete information about Penn
National.
About Penn National Gaming
With the nation’s largest and most diversified regional gaming
footprint, including 41 properties across 19 states, Penn National
continues to evolve into a highly innovative omni-channel provider
of retail and online gaming, live racing and sports betting
entertainment. The Company’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. Our wholly-owned interactive division,
Penn Interactive, operates retail sports betting across the
Company’s portfolio, as well online social casino, bingo and
iCasino products. In February 2020, Penn National entered into a
strategic partnership with Barstool Sports, pursuant to which
Barstool agreed to exclusively promote the Company’s land-based and
online casinos and sports betting products, including the Barstool
Sportsbook mobile app, to its national audience of over 66 million.
The Company’s omni-channel approach is bolstered by the mychoice
loyalty program, which rewards and recognizes its over 20 million
members for their loyalty to both retail and online gaming and
sports betting products with the most dynamic set of offers,
experiences and service levels in the industry.
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,” “goal,” “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. Such statements are
all subject to risks, uncertainties and changes in circumstances
that could significantly affect the Company’s future financial
results and business.
Accordingly, the Company cautions that the forward-looking
statements contained herein are qualified by important factors that
could cause actual results to differ materially from those
reflected by such statements. Such factors include, but are not
limited to, risks related to the following: (a) the anticipated use
of proceeds from the Common Stock Offering and the Convertible
Notes Offering; (b) the magnitude and duration of the impact of the
COVID-19 pandemic on capital markets, general economic conditions,
unemployment, consumer spending and the Company’s liquidity,
financial condition, supply chain, operations and personnel; (c)
industry, market, economic, political, regulatory and health
conditions; (d) disruptions in operations from data protection
breaches, cyberattacks, extreme weather conditions, medical
epidemics or pandemics such as COVID-19, and other natural or
manmade disasters or catastrophic events; (e) the reopening of the
Company’s gaming properties are subject to various conditions,
including numerous regulatory approvals and potential delays and
operational restrictions; (f) our ability to access additional
capital on favorable terms or at all; (g) our ability to remain in
compliance with the financial covenants of our debt obligations;
(h) the consummation of the proposed Morgantown and Perryville
transactions with GLPI are subject to various conditions, including
third-party agreements and approvals, and accordingly may be
delayed or may not occur at all; (i) actions to reduce costs and
improve efficiencies to mitigate losses as a result of the COVID-19
pandemic could negatively impact guest loyalty and our ability to
attract and retain employees; (j) the outcome of any legal
proceedings that may be instituted against the Company or its
directors, officers or employees; (k) the impact of new or changes
in current laws, regulations, rules or other industry standards;
(l) the ability of our operating teams to drive revenue and
margins; (m) the impact of significant competition from other
gaming and entertainment operations; (n) our ability to obtain
timely regulatory approvals required to own, develop and/or operate
our properties, or other delays, approvals or impediments to
completing our planned acquisitions or projects, construction
factors, including delays, and increased costs; (o) 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 we do or
seek to do business (such as a smoking ban at any of our properties
or the award of additional gaming licenses or new forms of gaming
in states we operate in or proximate to our properties, as recently
occurred with Illinois and Pennsylvania legislation); (p) 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; (q) the activities of
our competitors (commercial and tribal) and the rapid emergence of
new competitors (traditional, internet, social, sweepstakes based
and VGTs in bars and truck stops); (r) increases in the effective
rate of taxation for any of our operations or at the corporate
level; (s) our 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; (t) the costs and
risks involved in the pursuit of such opportunities and our ability
to complete the acquisition or development of, and achieve the
expected returns from, such opportunities; (u) our expectations for
the continued availability and cost of capital; (v) the impact of
weather, including flooding, hurricanes and tornadoes; (w) changes
in accounting standards; (x) the risk of failing to maintain the
integrity of our information technology infrastructure and
safeguard our business, employee and customer data (particularly as
our iGaming division grows); (y) with respect to our iGaming and
sports betting endeavors, the impact of significant competition
from other companies for online sports betting, iGaming and
sportsbooks, our ability to achieve the expected financial returns
related to our investment in Barstool Sports, our ability to obtain
timely regulatory approvals required to own, develop and/or operate
sportsbooks may be delayed and there may be impediments and
increased costs to launching the online betting, iGaming and
sportsbooks, including delays, and increased costs, intellectual
property and legal and regulatory challenges, as well as our
ability to successfully develop innovative products that attract
and retain a significant number of players in order to grow our
revenues and earnings, our ability to establish key partnerships,
our ability to generate meaningful returns and the risks inherent
in any new business; (z) with respect to our proposed Pennsylvania
Category 4 casinos in York and Berks counties, risks relating to
construction, and our ability to achieve our expected budgets,
timelines and investment returns, including the ultimate location
of other gaming properties in the Commonwealth of Pennsylvania; and
(aa) other factors included in “Risk Factors” of the Company’s
Annual Report on Form 10-K for the year ended December 31, 2019,
the Company’s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2020, subsequent Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K, each as filed with the U.S. 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20200519005895/en/
General Media Inquiries: Eric Schippers, Sr. Vice
President, Public Affairs Penn National Gaming 610/373-2400
Financial Media and Analyst Inquiries: Justin Sebastiano,
Sr. Vice President of Finance and Treasurer Penn National Gaming
610/373-2400
Joseph N. Jaffoni, Richard Land JCIR 212/835-8500 or
penn@jcir.com
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