WYOMISSING, Pa.--(BUSINESS WIRE)--Penn National Gaming, Inc. (PENN: Nasdaq) (“Penn National Gaming” or the “Company”) announced today that it has secured approvals from five regulatory agencies that have jurisdiction over its gaming and racing operations of the steps necessary to implement the previously announced planned separation of its operating assets and real property assets.
The steps necessary to implement the planned separation were approved today by the Illinois Gaming Board and Maryland Lottery and Gaming Control Commission following approval yesterday by the Maine State Harness Racing Commission. Additionally, the Ohio Casino Control Commission yesterday approved the suitability of Gaming and Leisure Properties, Inc. (“GLPI”) and its subsidiary GLP Capital, L.P., following its approval of the transactional aspects of the planned separation in August. Upon securing approvals from all regulatory agencies that have jurisdiction over the Company’s gaming and racing operations and satisfaction of other conditions, the Company plans to separate its operating assets from its real property assets into two publicly traded companies, and GLPI would become a publicly traded real estate investment trust (“REIT”) holding substantially all of the Company’s real property assets.
The Company believes that the approval of the Indiana Gaming Commission (“IGC”) is the only remaining gaming agency approval required prior to consummation of the separation. In April, the IGC granted GLP Capital, L.P. a temporary supplier license and today the IGC issued the Permanent Supplier License for GLP Capital, L.P., granted its final approval and authorization to transfer the gaming license and affirmed the REIT structure. The IGC has advised the Company that the remaining needed authorization for Penn National Gaming to proceed with its financings, is expected within the Company’s timeline to initiate and effect the transaction.
Upon securing the final IGC approval, the remaining conditions that must be satisfied in order to proceed with the proposed transaction, include, without limitation, the registration statement (File No. 333-188608) for the proposed transaction filed by GLPI with the U.S. Securities and Exchange Commission (the “SEC”) being declared effective by the SEC, the completion of the financings needed to fund each of the public companies, and the continuing validity of the factual representations underlying the private letter ruling from the Internal Revenue Service (“IRS”), all of which are described in further detail in GLPI’s registration statement.
On November 15, 2012, the Company announced its intent to pursue a plan to separate its operating assets and real property assets into two publicly traded companies – an operating entity, Penn National Gaming, and a newly formed entity, GLPI, that intends to become a publicly traded REIT, and that it had received a private letter ruling from the IRS related to the tax treatment of the separation and the qualification of GLPI as a 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. The completion of the proposed transaction was contingent on receipt of approvals from gaming regulators in certain states where the Company has operations as well as other conditions.
Following the announcement on November 15, 2012, the Company notified each of the 27 regulatory agencies that have jurisdiction over its gaming and racing operations of the proposed separation and has made, and is continuing to make, all documentary filings required or requested by the various agencies. The Company believes that no further regulatory approvals will be required by 26 of the 27 agencies 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 on 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.
GLPI has filed a registration statement (File No. 333-188608) with the SEC for the proposed transaction. Investors are encouraged to read the registration statement, as amended, because it contains more complete information about GLPI and its separation from the Company including financial information and disclosures regarding GLPI’s capital structure, senior management and relationship with Penn National Gaming as well as a detailed description of the conditions that must be satisfied in order to proceed with the proposed transaction. Subject to satisfaction of the applicable conditions, the Company is planning to consummate the separation in the fourth quarter of 2013.
Based on Penn National Gaming’s current real estate portfolio, GLPI is expected to initially own the real estate associated with 19 casino facilities, which have a total of over 2,900 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 17 of these casino facilities and own and operate two gaming facilities 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, Inc. and its subsidiaries (collectively, the “Company”) believe 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, the anticipated timing of the proposed separation, 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 GLPI’s registration statement on Form S-11, as amended, 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.
