Gaming and Leisure Properties Inc. (GLPI) has announced an agreement to acquire all of the real estate assets of casino operator Pinnacle Entertainment in a $4.75b all-stock deal.
Under the deal, which was approved by both companies’ boards of directors, Pinnacle’s operating business and the real property of Belterra Park Gaming & Entertainment will be spun off into a separately traded public company (OpCo) and the real estate assets held by the remaining company (PropCo) will be acquired by GLPI.
Pinnacle shareholders will receive 0.85 shares of GLPI stock per Pinnacle share for PropCo and one share of OpCo common stock for each share of Pinnacle they own.
The deal gives GLPI a total of 35 casino properties and hotel facilities in 14 states.
“Pinnacle’s real estate portfolio brings great properties to GLPI and adds one of the leading gaming operators as a new tenant,” said GLPI Chairman and CEO Peter Carlino. “Pinnacle’s proven track record of continued improving operating performance will make GLPI even stronger as we pursue long-term growth. The combination of these extremely attractive gaming real estate portfolios will create the third largest publicly traded triple-net REIT, with the scale, diversity and financial strength to deliver increased value to both companies’ shareholders.”
“This is a compelling transaction that unlocks the value of Pinnacle’s real estate assets and delivers substantial value to our shareholders,” said Pinnacle CEO Anthony Sanfilippo. “In addition, Pinnacle shareholders will have the opportunity to benefit from owning a larger, more diversified REIT.
GLPI raised its bid to acquire Pinnacle’s real estate assets earlier this month, which it called its final effort. GLPI values all of Pinnacle at $47.50 per share, a 54% increase from previous offers valued at $36 per share. The company said that it was committed to immediately finalize the deal with financing already in place.
The transaction is expected to be completed in the first quarter of 2016.