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Penn National spinoff could allow for P.G. casino license without selling Perryville
Gary Haber
Baltimore Business Journal
A move by Penn National Gaming could enable the company to win a license for a casino in Prince George’s County without having to sell its Hollywood Perryville casino.
The Wyomissing, Pa., casino and horse track owner filed plans Thursday with the Securities and Exchange Commission for an initial public offering, creating a separate, independent company that would own the Cecil County casino and 18 other Penn National gaming facilities in 13 states.
The proposed spinoff, to be called Gaming and Leisure Properties Inc., would be structured as a real estate investment trust. It would be the first gaming-focused REIT in the U.S., Gaming and Leisure Properties said in the filing. GLPI incorporated in Pennsylvania on Feb. 13.
Maryland law prohibits casino operators from holding two casino licenses. That restriction posed only a theoretical problem for Penn National until May 10 when it submitted a bid with Maryland’s Video Lottery Facility Location Commission for a casino license in Prince George’s County. Penn National wants to build a $700 million casino and hotel in Fort Washington at Rosecroft Raceway, which it owns. It is competing against MGM Resorts International (NYSE: MGM), which wants to build an $800 million casino at National Harbor; and Greenwood Gaming, which has proposed a $700 million casino and hotel in Fort Washington on 22 acres at Indian Head Highway and Old Fort Road. MGM’s plans for a National Harbor casino has the backing of PG County Executive Rushern L. Baker III.
One reason for Penn National’s proposed spinoff is to allow the company to bid for multiple casino licenses in Maryland and other states that restrict a company to a single license, Karen Bailey, a Penn National spokeswoman, said in an email Thursday. However, the primary reason for seeking to create the REIT is to “generate additional value for our shareholders,” Bailey said in the email.
John Kempf, an analyst at RBC Capital Markets, wrote in an April 19 research note that “the recently announced asset separation into a REIT and operating company will unlock value of the company.” Penn National shareholders would get one share of GLPI for each Penn National share they own.
Under the spinoff, first announced in November, GLPI would own the casinos, while Penn National would operate them.
Bank of America Merrill Lynch and Wells Fargo & Co. are advising Penn National on the proposed spinoff. Gaming and Leisure Properties Inc. intends to trade on NASDAQ under the ticker symbol “GLPI”.
GLPI’s filing said it plans to issue 99.8 million shares. The filing did not specify much it plans to offer the shares for.
The spinoff will also result in management changes atop Penn National. Peter M. Carlino, Penn National’s CEO and chairman, will serve as GLPI’s CEO and chairman. After GLPI is spun off from Penn National, Carlino will remain Penn National’s chairman. Timothy J. Wilmott, Penn National’s president, will be elevated to Penn National’s CEO.
Donald C. Fry, chairman of the Video Lottery Facility Location Commission, could not be reached for comment.
http://m.bizjournals.com/baltimore/news/2013/05/16/penn-national-spinoff-could-allow-for.html?page=all&r=full
Baltimore Business Journal
The Wyomissing, Pa., casino and horse track owner filed plans Thursday with the Securities and Exchange Commission for an initial public offering, creating a separate, independent company that would own the Cecil County casino and 18 other Penn National gaming facilities in 13 states.
The proposed spinoff, to be called Gaming and Leisure Properties Inc., would be structured as a real estate investment trust. It would be the first gaming-focused REIT in the U.S., Gaming and Leisure Properties said in the filing. GLPI incorporated in Pennsylvania on Feb. 13.
Maryland law prohibits casino operators from holding two casino licenses. That restriction posed only a theoretical problem for Penn National until May 10 when it submitted a bid with Maryland’s Video Lottery Facility Location Commission for a casino license in Prince George’s County. Penn National wants to build a $700 million casino and hotel in Fort Washington at Rosecroft Raceway, which it owns. It is competing against MGM Resorts International (NYSE: MGM), which wants to build an $800 million casino at National Harbor; and Greenwood Gaming, which has proposed a $700 million casino and hotel in Fort Washington on 22 acres at Indian Head Highway and Old Fort Road. MGM’s plans for a National Harbor casino has the backing of PG County Executive Rushern L. Baker III.
One reason for Penn National’s proposed spinoff is to allow the company to bid for multiple casino licenses in Maryland and other states that restrict a company to a single license, Karen Bailey, a Penn National spokeswoman, said in an email Thursday. However, the primary reason for seeking to create the REIT is to “generate additional value for our shareholders,” Bailey said in the email.
John Kempf, an analyst at RBC Capital Markets, wrote in an April 19 research note that “the recently announced asset separation into a REIT and operating company will unlock value of the company.” Penn National shareholders would get one share of GLPI for each Penn National share they own.
Under the spinoff, first announced in November, GLPI would own the casinos, while Penn National would operate them.
Bank of America Merrill Lynch and Wells Fargo & Co. are advising Penn National on the proposed spinoff. Gaming and Leisure Properties Inc. intends to trade on NASDAQ under the ticker symbol “GLPI”.
GLPI’s filing said it plans to issue 99.8 million shares. The filing did not specify much it plans to offer the shares for.
The spinoff will also result in management changes atop Penn National. Peter M. Carlino, Penn National’s CEO and chairman, will serve as GLPI’s CEO and chairman. After GLPI is spun off from Penn National, Carlino will remain Penn National’s chairman. Timothy J. Wilmott, Penn National’s president, will be elevated to Penn National’s CEO.
Donald C. Fry, chairman of the Video Lottery Facility Location Commission, could not be reached for comment.
http://m.bizjournals.com/baltimore/news/2013/05/16/penn-national-spinoff-could-allow-for.html?page=all&r=full
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