Anthony Sanfilippo, CEO of Pinnacle Entertainment: ‘ This is usually a compelling transaction that unlocks the value of Pinnacle’s property assets and delivers substantial value to your shareholders.’
Gaming and Leisure Properties Inc (GLPI), the gambling industry’s first estate that is real trust (REIT), will acquire all of Pinnacle Entertainment’s real estate’s assets in an all-stock transaction 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 product and the real home of Belterra Park Gaming & Entertainment is spun off in to a separately traded company that is public as OpCo, while GLPI will obtain the real estate assets of the remaining business, PopCo.
Pinnacle investors will own roughly 27 percent of the combined business and 100 percent of OpCo.
The enlarged group will form a powerhouse real-estate investment trust which will own 35 casino and hotel facilities in 14 states, the third-largest publicly traded triple-net REIT in the world.
Pinnacle traces its history back to 1938, when Jack L Warner opened the Hollywood Park Racetrack.
Today it owns 15 casino properties throughout the US and also has a 26 % stake in Asian Coast Development Ltd, the owner and developer associated with the Ho Tram Strip in Vietnam.
The company changed its title from Hollywood Park Inc to Pinnacle Entertainment when the racetrack was offered 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 profile and essentially doubling in proportions.
‘Pinnacle’s real estate profile brings great properties to GLPI and adds one for the leading gaming operators being a new tenant,’ said Peter Carlino, Chairman and CEO of GLPI. ‘Pinnacle’s proven track record of continued improving operating performance will make GLPI even more powerful as we pursue long-term growth.’
The REIT Material
A REIT is a company that buys property through combined investment. It works just like a shared investment, 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 yields that are high.
GLPI, formed in November 2013, is a spin-off of Penn nationwide Gaming and owns 21 casino and racino properties across the United States, such as the Penn nationwide Race Course in Grantville, Pennsylvania. It currently trades on the NASDAQ.
‘ This is a transaction that is compelling 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 shareholders will have the chance to benefit from having a bigger, more diversified REIT. As a premier operator of casino, entertainment and resort properties, Pinnacle will stay to improve its working efficiency, expand property degree margins and pursue growth opportunities that leverage the Company’s proven administration and development skills.’
Chinese Stock Marketplace Tumble Could Affect Macau Casinos
Asia’s largest stock market fell by 8.5 percent on Monday, continuing a trend of volatility. Could Macau’s casinos feel the impact? (Image: business.financialpost.com)
The stock that is chinese declined by a worrying 8.5 percent on Monday, after a day of panic selling led to dropping prices across the board. It had been a conference which had a ripple impact on markets around the world, and one that could finally hurt the chances for a smooth data recovery in Macau.
The drop within the Shanghai Composite Index ended up being really massive. For a sense of perspective, it was the same to something like a 1,500-point drop in the Dow Jones Industrial Average.
What was most surprising was that the drop wasn’t the effect of a news that is shocking or a particularly devastating group of economic indicators. Instead, it showed up to be just a later date in what has been an ever more volatile month for the Chinese stock exchange.
Drop Follows Government-Funded Rally
The drop comes after a 16 percent rally that started on July 8, when the Chinese government enacted 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 taking actions to balance sell requests, or they couldn’t maintain the overwhelming number of sell offs that were taking place, but whatever the reason why, it had beenn’t a good day.
Along with spending about $800 billion to prop the stock market up, the Chinese government has had other steps within the last two weeks in an attempt to stop the offering trend. Short-selling was restricted, some shareholders that are large banned from selling stock, some companies stopped trading completely, and IPOs were suspended.
The fact that some popular government rescue fund purchases, such as PetroChina, saw big dips on your day suggested that the government purchases had either slowed or stopped. Whether this was a temporary measure to see if the market could support it self or a sign of moving techniques is unclear.
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 may have been among the key factors behind a fall in American stock areas early Monday morning as well, while commodity costs such as oil also fell on worries about international development.
Stock Market never as Critical to Economy in Asia
However, the effect of the stock market decline may maybe not be as broad or sharp because it would be if a similar tumble took destination in the us. While tens of Chinese residents have investments into the stock market, that’s nevertheless half the normal commission regarding the country as a entire, and the stock exchange isn’t considered a leading financial indicator in China because it is in the usa.
This means that analysts believe the impact of even a drop that is drastic the market will probably be muted. And despite the turmoil, bond prices were actually barely impacted. But that doesn’t mean that Macau will not feel some impact from the tumultuous stock market.
To begin with, those people who are committed to China have a tendency to be wealthy: exactly the mainland clients that Macau gambling enterprises are searching to attract as higher-end or even VIP players. And if there is a follow-up effect on the Chinese economy being a whole, that would be a devastating blow to Macau’s gaming industry, which is hoping that as time passes, the mass market helps replace the dearth of high rollers following a Chinese government’s corruption crackdown over the past year.
No doubt gaming operators with vested interests in Macau’s casino economy were doing some serious knuckle-biting as the Chinese currency markets news came in. And no doubt they’ll be keeping an eye that is close the trends continue steadily 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 amazed’ when the bwin.party board made a decision to reject his Amaya-backed proposal. Now the business is back with an offering that is new. (Image: Tony Larkin/sbcnews.co.uk)
GVC Holdings has pressed forward a surprise bid of almost £1 billion ($1.55 billion) for bwin.party, this time without the assistance that is financial of Inc.
Instead, GVC, that includes a market cap just one-third of bwin’s, has nailed straight down funding for the proposed takeover by way of a $443 million loan that is secured US personal equity group Cerberus Capital.
With the move, GVC trounces a bid from 888 Holdings that was thought to maintain the case by almost $100 million, which begs the concern: will back 888 bite?
There’s without doubt that the bwin.party board likes the idea of an 888 takeover. With various synergies between the two companies, particularly in regulated markets, that hookup may likely facilitate integration and produce expense savings further down the line.
Amaya Out 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 procedure between these two suitors, because it felt it ended up being the riskier proposal.
The GVC/Amaya offer had been £10 million more than 888’s, but this was dismissed as no more than a ‘modest incremental premium’ by the bwin board.
‘ I was really surprised when [bwin] made that choice,’ 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 had been progressing well. We would have got there but they took your decision 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, combined with the significantly sweetened pot, could well be tempting to bwin’s shareholders.
Bwin, which had already recommended the 888 bid to shareholders and appeared to be going forward with the deal, had clearly caught wind of the rumors whenever it announced within the weekend that it was nevertheless open to offers.
‘The board has suggested an offer from 888 and we are working towards getting that done,’ a Bwin spokesman stated. ‘Should GVC or anyone else put forward an attractive, completely financed and deliverable offer then of program the board will contemplate it against 888’s current offer.’
Bwin itself, however, might have been amazed by the scale of the brand new bid, since many analysts speculated that GVC would struggle to improve the capital necessary to trump 888. However now, as the battle for bwin escalates into a raising war, insiders are fully expecting a counter-proposal.
And the stakes could be high for 888. The company only recently survived a takeover bid from Ladbrokes, and, as a time period of consolidation becomes a prerequisite for the gambling industry in the united kingdom and European countries, failure here could result in a reinstatement of those, or similar, negotiations.