Casino Could be Sold

Penn National has entered into an agreement with Fortress Investment Group and Centerbridge Partners to buy the company for $8.9 billion. The amount that they are purchasing it for includes the $2.8 billion of outstanding debt that Penn National owes as well.

This is a cause of concern for many in the area of Cherokee County in Kansas. Penn National Gaming has a proposed $225 million casino complex near Galena in Kansas, and now it looks like it is being bought out by another company.

Some residents are concerned as to what this will mean for their casino – but the casino wants to assure everyone that they will not be affected by the change. Eric Schippers, VP of Public Affairs for Penn National says that the new owners are just as committed as Penn was. He says that they are simply “trading public shareholders for private shareholders.”

Some gambling analysts are recommending a hold on the company’s stocks, since their shares will continue to be traded for a year or more until the deal gains shareholder and regulatory approval. Experts say that investors in the casino industry are consistently applying higher valuations to their assets in AC or Las Vegas, because they are land based casinos and the tax rate is different. However, the “valuation gap appears to be narrowing” because of the offer for Penn National.

 

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