WYOMISSING, Pa.--(BUSINESS WIRE)--Sep. 26, 2013--
Penn National Gaming, Inc. (PENN: Nasdaq) (“Penn National Gaming” or the
“Company”) announced today that its Board of Directors has approved,
subject to certain terms and conditions, the tax-free spin-off (the
“spin-off”) to its shareholders of substantially all of the Company’s
real property assets through the distribution of the shares of common
stock of its subsidiary, Gaming and Leisure Properties, Inc. (“GLPI”).
Each Penn National Gaming shareholder will receive one share of common
stock of GLPI for every share of Penn National Gaming common stock held
by such shareholder at the close of business on October 16, 2013, the
record date for the spin-off. The distribution is expected to be made on
November 1, 2013. Following the spin-off, the Company will continue to
be listed on the NASDAQ Stock Market under the symbol “PENN,” and GLPI
expects to list its common stock on the NASDAQ Stock Market under the
symbol “GLPI.”
Holders of the Company’s common stock as of the record date will not be
required to take any action to participate in the spin-off. GLPI has
filed a registration statement (File No. 333-188608) with the U.S.
Securities and Exchange Commission (the “SEC”) for the proposed
transaction (as amended, the “Registration Statement”). Investors are
encouraged to read the Registration Statement because it contains more
complete information about GLPI and its separation from the Company,
including information regarding exchanges with certain shareholders of
the Company, senior management and relationship with Penn National
Gaming, financial information and disclosures regarding GLPI’s capital
structure, as well as a detailed description of the conditions that must
be satisfied in order to proceed with the proposed transaction.
The completion of the proposed transaction is contingent upon receipt of
approvals from gaming regulators in certain states where the Company has
operations, as well as other conditions. On September 19, 2013, the
Company announced that it believes the approval by the Indiana Gaming
Commission (“IGC”) for Penn National Gaming to proceed with its related
financings is the only remaining gaming agency approval required prior
to consummation of the separation and that such approval is expected
within the Company’s timeline to complete the transaction. The Company
believes that no further regulatory approvals will be required by the
other 26 agencies that have jurisdiction over its gaming and racing
operations prior to the consummation of the separation and distribution
of shares of GLPI common stock. The approvals received from each
regulatory agency remain subject to continuing compliance with each
agency’s regulations and transaction approvals and conditions. No
assurance can be given as to the receipt or timing of the remaining
regulatory approval or whether any of the 27 regulatory agencies may
require the Company or GLPI to provide additional information or obtain
additional approvals.
The completion of the spin-off is subject to other conditions in
addition to the receipt of regulatory approvals including, without
limitation, the Registration Statement being declared effective by the
SEC, the completion of the related financings needed to fund each of the
Company and GLPI, the continuing validity of the factual representations
underlying the private letter ruling from the Internal Revenue Service
(“IRS”), and the receipt of certain opinions from legal and tax
advisors, all of which conditions are described in further detail in the
Registration Statement. The Company previously received a private letter
ruling from the IRS related to the tax treatment of the separation and
the qualification of GLPI as a real estate investment trust (“REIT”).
The private letter ruling is subject to certain qualifications,
including the accuracy of the representations and statements made by the
Company to the IRS.
Following the spin-off, GLPI intends to elect to be taxed as a REIT for
U.S. federal income tax purposes beginning with the 2014 taxable year,
and to declare a one-time taxable cash and stock dividend in January
2014 to distribute any accumulated earnings and profits (“E&P”)
attributable to any pre-REIT years to comply with certain REIT
qualification requirements. Penn National Gaming estimates that the GLPI
dividend will total approximately $1.05 billion, or $11.92 per share of
GLPI common stock at declaration of the E&P dividend, and will be paid
in a combination of cash and GLPI common stock. As a REIT, GLPI will be
required to distribute at least 90% of its annual taxable income as
dividends which, based on pro forma 2013 guidance provided on July 23,
2013, are estimated to be approximately $2.32 per share annually.
Based on Penn National Gaming’s current real estate portfolio, GLPI is
expected to own immediately after the separation the real estate
associated with 21 casino facilities, which have a total of over 3,219
acres of land and 6.6 million square feet of building space, including
two facilities currently under development in Dayton and Youngstown,
Ohio. GLPI would lease back to Penn National Gaming 19 of these casino
facilities and own and operate, through taxable REIT subsidiaries, two
gaming facilities located in Baton Rouge, Louisiana and Perryville,
Maryland.
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. The
Company presently operates twenty-eight facilities in eighteen
jurisdictions, including Florida, Illinois, Indiana, Iowa, Kansas,
Louisiana, Maine, Maryland, Mississippi, Missouri, Nevada, New Jersey,
New Mexico, Ohio, Pennsylvania, Texas, West Virginia, and Ontario. In
aggregate, Penn National’s operated facilities currently feature
approximately 34,500 gaming machines, 850 table games, 2,900 hotel rooms
and 1.6 million square feet of gaming floor space.
Forward-looking Statements
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Actual
results may vary materially from expectations. Although Penn National
Gaming believes that our expectations are based on reasonable
assumptions within the bounds of our knowledge of our business and
operations, 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 related to the following: the proposed separation of
GLPI from the Company, including our ability to timely receive all
necessary consents and approvals and satisfy all conditions to the
consummation of the spin-off, the anticipated timing of the proposed
spin-off, the expected tax treatment of the proposed transaction, the
ability of each of the post spin Company and GLPI to conduct and expand
their respective businesses following the proposed spin-off, and the
diversion of management’s attention from traditional business concerns;
our ability to raise the capital necessary to finance the spin-off,
including the redemption of our existing debt and preferred stock
obligations, the anticipated cash portion of GLPI’s special E&P dividend
and transaction costs; and other factors as discussed in the
Registration Statement, and the Company’s Annual Report on Form 10-K for
the year ended December 31, 2012, subsequent Quarterly Reports on Form
10-Q and Current Reports on Form 8-K as filed with the SEC. The Company
does not intend to update publicly any forward-looking statements except
as required by law.
Source: Penn National Gaming, Inc.
Penn National Gaming, Inc.
William J. Clifford
Chief Financial
Officer
610/373-2400
or
JCIR
Joseph N. Jaffoni,
Richard Land
212/835-8500 or penn@jcir.com
