
Anthony Sanfilippo, CEO of Pinnacle Entertainment: ‘ This will be a transaction that is compelling unlocks the value of Pinnacle’s real estate assets and delivers substantial value to your shareholders.’
Gaming and Leisure Properties Inc (GLPI), the gambling industry’s first owning a home trust (REIT), will obtain all of Pinnacle Entertainment’s real-estate’s assets in an all-stock deal that values the holdings at $4.74 billion.
Pinnacle rebuffed a GLPI offer in March well worth $4.1 billion.
Underneath the terms of the deal, Pinnacle’s running unit and the actual home of Belterra Park Gaming & Entertainment will likely be spun off in to a separately traded public company known as OpCo, while GLPI will obtain the real estate assets of the residual company, PopCo.
Pinnacle investors will own roughly 27 % of the combined business and 100 percent of OpCo.
The enlarged group will form a powerhouse real-estate investment trust that will own 35 casino and resort facilities in 14 states, the third-largest publicly traded triple-net REIT in the world.
Pinnacle’s Achievements
Pinnacle traces its history back to 1938, when Jack L Warner exposed the Hollywood Park Racetrack.
It owns 15 casino properties across the US and also has a 26 percent stake in Asian Coast Development Ltd, the owner and developer of the Ho Tram Strip in Vietnam today.
The company changed its name from Hollywood Park Inc to Pinnacle Entertainment when the racetrack was sold to Churchill Downs in 2000.
In 2013 Pinnacle acquired Ameristar Casinos for $869 million and $1.9 billion of assumed debt, adding nine new properties to its portfolio and essentially doubling in dimensions.
‘Pinnacle’s real estate portfolio brings great properties to GLPI and adds one of this leading gaming operators as being a new tenant,’ said Peter Carlino, Chairman and CEO of GLPI. ‘Pinnacle’s proven track record of continued operating that is improving will make GLPI even stronger as we pursue long-term growth.’
The REIT Stuff
A REIT is just a ongoing company that buys property through combined investment. It works like a mutual fund, allowing both big and small investors to own a shares of real estate.
But because they receive special taxation considerations, REITS can trade at higher stock market prices, and so typically offer investors high yields.
GLPI, formed in November 2013, is just a spin-off of Penn National Gaming and owns 21 casino and racino properties across the US, such as the Penn nationwide Race Course in Grantville, Pennsylvania. It currently trades on the NASDAQ.
‘ This is a compelling transaction that unlocks the worthiness of Pinnacle’s real-estate assets and delivers substantial value to our investors,’ said Anthony Sanfilippo, CEO of Pinnacle Entertainment.
‘In addition, Pinnacle investors may have the opportunity to benefit from having a larger, more REIT that is diversified. As a premier operator of casino, entertainment and resort properties, Pinnacle will continue to improve its running efficiency, expand property level margins and pursue development opportunities that leverage the Company’s proven management and development skills.’
Chinese Stock Market Tumble Could Influence Macau Casinos
Asia’s stock market that is largest dropped by 8.5 percent on Monday, continuing a trend of volatility. Could Macau’s casinos have the effect? (Image: company.financialpost.com)
The Chinese stock market declined by a stressing 8.5 percent on Monday, after a day of panic selling resulted in dropping rates across the board. It ended up being a meeting which had a ripple influence on markets around the world, and the one that could eventually hurt the chances for a smooth recovery in Macau.
The drop within the Shanghai Composite Index ended up being truly massive. For the sense of perspective, it was very same to something like a 1,500-point drop in the Dow Jones Industrial Average.
The thing that was most surprising was that the drop wasn’t the result of a news that is shocking or an especially devastating group of economic indicators. Instead, it showed up to be just a later date in just what has been an ever more volatile thirty days for the stock market that is chinese.
Drop Follows Government-Funded Rally
The fall comes after a 16 percent rally that started on July 8, when the government that is chinese a rescue package designed to keep stock prices afloat. But on that support no longer seemed to be there monday.
Either the us government had stopped using steps to balance sell requests, or they couldn’t maintain the overwhelming wide range of sell offs which were using place, but whatever the main reason, it wasn’t a good day.
Along with spending about $800 billion to prop the stock market up, the Chinese government has brought other actions within the last two weeks in an effort to stop the attempting to sell trend. Short-selling was restricted, some shareholders that are large prohibited from offering stock, some companies stopped trading completely, and IPOs were suspended.
The undeniable fact that some government that is popular fund purchases, such as PetroChina, saw big dips on the afternoon suggested that the government purchases had either slowed or stopped. Whether this was a short-term measure to see if the market could support it self or a sign of moving techniques is ambiguous.
The result was dramatic, and didn’t stop at the Chinese borders in any case. The falling market and concerns that China’s development is slowing might have been among the leading causes of a fall in American stock areas early Monday morning as well, while commodity prices such as oil additionally fell on concerns about global growth.
Stock Market Not as Critical to Economy in Asia
However, the impact of the stock market decline may perhaps not be as broad or sharp since it would be if a tumble that is similar destination in america. While tens of Chinese residents have investments into the stock market, that’s nevertheless half the normal commission associated with the nation being a entire, and the stock exchange isn’t considered a leading economic indicator in China since it is in the usa.
This means that analysts believe the impact of even a drop that is drastic the market is going to be muted. And despite the turmoil, relationship prices were actually barely impacted. But that does not mean that Macau will not feel some effect from the stock market that is tumultuous.
Those who are invested in China tend to be wealthy: exactly the mainland clients that Macau casinos are looking to attract as higher-end or even VIP players for one thing. And if there is a follow-up effect on the Chinese economy as a whole, that could be a devastating blow to Macau’s video gaming industry, which is hoping that as time passes, the mass market can help replace the lack of high rollers following the Chinese government’s corruption crackdown within the year that is past.
No doubt gaming operators with vested interests in Macau’s casino economy were doing some knuckle-biting that is serious the Chinese stock market news arrived in. With no doubt they are going to be keeping an eye that is close the trends continue to unfold in coming weeks.
GVC Moves All-in for $1.5 Billion in Battle for Bwin.Party
GVC CEO Kenneth Alexander said he had been ‘very surprised’ whenever the bwin.party board chose to reject his Amaya-backed proposal. Now the organization has returned with a new offering. (Image: Tony Larkin/sbcnews.co.uk)
GVC Holdings has pressed forward a shock bid of almost £1 billion ($1.55 billion) for bwin.party, this time without the financial assistance of Amaya Inc.
Instead, GVC, which has a market cap just one-third of bwin’s, has nailed straight down funding for the proposed takeover via a $443 million loan that is secured US private equity group Cerberus Capital.
With the move, GVC trounces a bid from 888 Holdings that was thought to take the case by almost $100 million, which begs the concern: will 888 bite back?
There is without doubt that the bwin.party board likes the basic idea of an 888 takeover. With various synergies between the two companies, particularly in regulated markets, that hookup would probably facilitate integration and create cost savings further down the line.
Amaya From the Picture
Bwin.party ultimately rejected the original GVC/Amaya bid of £908 million ($1.41 billion), which proposed dividing the sports book and the poker operation between these two suitors, because it felt it was the riskier proposal.
The GVC/Amaya offer was £10 million more than 888′s, but this ended up being dismissed as no more than a ‘modest incremental premium’ by the board that is bwin.
‘ I was really surprised when [bwin] made that decision,’ Kenneth Alexander, chief executive of GVC, told London’s Financial Times on Monday. ’888 were there and we had been not quite there, but we were progressing well. We would have got there but the decision was taken by them they took.’
Rumors began circulating week that is last GVC was trying to find an investor to fund a solo bid, truncating Amaya, thus simplifying the equation.
This brand new dynamic, along with the notably sweetened pot, could well be tempting to bwin’s shareholders.
High Stakes
Bwin, which had already recommended the 888 bid to shareholders and appeared become going forward with the offer, had obviously caught wind regarding the rumors whenever it announced throughout the that it was still open to offers weekend.
‘The board has recommended an offer from 888 and we are working towards getting that done,’ a Bwin spokesman stated. ‘Should GVC or anyone else put forward an appealing, completely financed and deliverable offer then of program the board will ponder over it against 888′s current offer.’
Bwin itself, however, might have been amazed by the scale of the bid that is new since numerous analysts speculated that GVC would struggle to improve the capital necessary to trump 888. Nevertheless now, as the battle for bwin escalates into a war that is raising insiders are fully expecting a counter-proposal.
And the stakes might be high for 888. The company only recently survived a takeover bid from Ladbrokes, and, as a time period of consolidation becomes a necessity for the gambling industry in the UK and Europe, failure here could result in a reinstatement of those, or similar, negotiations.