WYOMISSING, Penn.--(BUSINESS WIRE)--May 29, 2018--
Penn National Gaming, Inc. (PENN: Nasdaq) (“Penn National” or the
“Company”) announced today that it has entered into a series of
agreements with an affiliate of the Jamul Indian Village of California
(“JIV” or the “Tribe”) and the JIV’s senior lender, which will complete
Penn National’s separation from Hollywood Casino Jamul – San Diego (“JIV
Casino”). In March 2018, Penn National disclosed plans for an orderly
transition of the management of the JIV Casino to JIV, and the Company’s
involvement in JIV Casino ended on May 28. These new agreements
terminate substantially all of the Company’s remaining obligations and
liabilities in connection with this project.
In October 2016, the Tribe obtained long term secured financing for the
JIV Casino, consisting of revolving and term loan credit facilities (the
“Credit Facilities”) totaling approximately $460 million. The term loan
C facility is held by the Company’s subsidiary, San Diego Gaming
Ventures, LLC. The borrower is currently in default on its obligations
under the loan and the Company’s loan is fully subordinated to the other
lenders that have extended credit to the Tribe. At present,
approximately $95 million is outstanding on the term loan C facility,
and the Company recorded charges of $89.8 million related to the loan
and related loan commitments in 2017. The net carrying value of the term
loan C and related obligations totaled $20.6 million at March 31, 2018.
As a result of the agreements, Penn National will receive a total of
approximately $15 million in cash proceeds for the sale of the loan and
the payment of outstanding licensing fees and the Company will be
relieved of its approximately $29 million current funding obligation.
The Company anticipates offsetting the capital loss associated with the
sale of the loan against the capital gains related to asset sales that
are part of the Company’s pending acquisition of Pinnacle Entertainment,
Inc., which should result in a net tax benefit of approximately $20
million.
About Penn National Gaming
Penn National Gaming owns, operates or has ownership interests in gaming
and racing facilities and video gaming terminal operations with a focus
on slot machine entertainment. At March 31, 2018, the Company operated
twenty-nine facilities in seventeen jurisdictions, including California,
Florida, Illinois, Indiana, Kansas, Maine, Massachusetts, Mississippi,
Missouri, Nevada, New Jersey, New Mexico, Ohio, Pennsylvania, Texas,
West Virginia, and Ontario, Canada. At March 31, 2018, in aggregate,
Penn National Gaming operated approximately 36,100 gaming machines, 810
table games and 4,800 hotel rooms. The Company also offers social online
gaming through its Penn Interactive Ventures division.
Important Additional Information
In connection with the proposed transaction, on February 8, 2018, Penn
filed with the Securities and Exchange Commission (the “SEC”) a
registration statement on Form S-4 that contains a joint proxy statement
of Penn and Pinnacle and also constitutes a prospectus of Penn (the
“joint proxy statement/prospectus”). The registration statement was
declared effective by the SEC on February 28, 2018 and Penn and Pinnacle
commenced mailing the definitive joint proxy statement/prospectus to
their respective shareholders and stockholders on February 28, 2018.
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of any
vote or approval. Shareholders of Penn and stockholders of Pinnacle are
urged to read the definitive joint proxy statement/prospectus regarding
the proposed transaction and any other relevant documents filed or that
will be filed with the SEC, as well as any amendments or supplements to
those documents, because they contain or will contain important
information. Investors may obtain a free copy of the registration
statement and the joint proxy statement/prospectus, as well as other
filings containing information about Penn and Pinnacle, without charge,
at the SEC’s website at www.sec.gov.
Copies of the documents filed with the SEC by Penn can be obtained,
without charge, by directing a request to Justin Sebastiano, Penn
National Gaming, Inc., 825 Berkshire Boulevard, Suite 200, Wyomissing,
Pennsylvania 19610, Tel. No. (610) 401-2029. Copies of the documents
filed with the SEC by Pinnacle can be obtained, without charge, by
directing a request to Vincent Zahn, Pinnacle Entertainment, Inc., 3980
Howard Hughes Parkway, Las Vegas, Nevada 89169, Tel. No. (702) 541-7777.
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.
Although the Company believes that its expectations are based on
reasonable assumptions within the bounds of its knowledge of its
business, there can be no assurance that actual results will not differ
materially from our expectations. Meaningful factors that could cause
actual results to differ from expectations include, but are not limited
to, risks relating to the successful transition of the Company’s
responsibilities and obligations with respect to the JIV Casino, the
ability of the Company to utilize any capital loss tax benefits and
unanticipated changes in tax laws, the various risks relating to the
Company’s pending acquisition of Pinnacle Entertainment, Inc., and other
factors as discussed in the Company’s Annual Report on Form 10-K for the
year ended December 31, 2017, 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180529006300/en/
Source: Penn National Gaming, Inc.
Penn National Gaming, Inc.
William J. Fair, 610-373-2400
Chief
Financial Officer
or
JCIR
Joseph N. Jaffoni, Richard Land
212-835-8500
penn@jcir.com