The transaction, which was first announced in December, will see Penn National Gaming take over Pinnacle’s 16 gaming and entertainment facilities in 11 jurisdictions across the US.
To address any potential concerns about violating US anti-trust laws, Pinnacle agreed to sell four of its Ameristar properties to Boyd Gaming Corp. for $575 million. Concurrent to this deal, Boyd Gaming will enter into a lease agreement with Gaming and Leisure Properties Inc., the landlord for Penn National and Pinnacle.
Upon the completion of the deal Penn National Gaming will own approximately 78% of the combined entity, with Pinnacle owning the rest. As a result of the deal, Penn National will operate a combined 41 properties with about 53,500 slots, 1,300 tables and 8,300 hotel rooms.
However further regulatory approvals are required before the transaction can be fully completed.
The merger is currently being investigated by the Federal Trade Commission, who recently requested a second batch of documents and business information from the two companies.
In a filing with the securities and exchanges commission, both said that they would “continue to cooperate fully with the FTC in its review of the merger” and that “Receipt of the Second Request was factored into the parties’ previously disclosed anticipated timetable for completing the Merger, which the parties continue to expect will occur in the second half of 2018.”
Despite still needing approvals from both regulators and the Federal Trade Commission, Timothy J. Wilmott, Chief Executive Officer of Penn National Gaming remained upbeat: “We are grateful for the prompt review by the PGCB and WVLC of the proposed transaction and are very pleased to have cleared the first regulatory hurdles on the path towards completing our proposed acquisition of Pinnacle Entertainment.
“We look forward to securing additional regulatory approvals in the near term, with our goal remaining to complete the transaction in the second half of 2018.”
Shareholders of both Penn National Gaming and Pinnacle are due to meet on 29 March to vote on matters related to the acquisition.
Wilmott added: “In the meantime, our transition team is making good progress formulating a new organizational structure, which will include a blend of proven and talented team members from both companies, while ensuring we meet or exceed our revenue and cost synergy targets.”
