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Owner of 3 Indiana casinos sells real estate in $4.7B deal

July 21, 2015

Wyomissing, Pennsylvania-based Gaming & Leisure Properties Inc. is buying the real estate assets of Las Vegas-based Pinnacle Entertainment Inc. in an all-share deal that gives the holdings an enterprise value of $4.75 billion.

Pinnacle shareholders are to receive 0.85 shares of Gaming & Leisure and one share of OpCo, a new company being spun off, Gaming & Leisure said in a written statement Tuesday.

The deal will create a combined real estate investment trust that will own 35 casino and hotel facilities in 14 states, including three in Indiana.

Among the holdings are three Indiana properties: Ameristar Casino Hotel in East Chicago, Belterra Casino Resort in Florence and Hollywood Casino in Lawrenceburg.

The casino industry has embraced REITS since Penn National Gaming Inc. spun off its real estate into Gaming & Leisure in November 2013. The trusts can trade at higher stock market values because they don’t pay federal income tax, passing earnings directly to shareholders instead.

The Gaming & Leisure transaction will create the third largest public traded triple-net REIT and boost adjusted funds from operations in the first year after the deal closes.

“Pinnacle’s proven track record of continued improving operating performance will make GLPI even stronger as we pursue long-term growth,” said Peter Carlino, Gaming & Leisure’s chairman and CEO.

Pinnacle shareholders will end up owning about 27 percent of the enlarged company and 100 percent of OpCo, which will consist of Pinnacle’s current operating business and the real estate of Belterra Park Gaming & Entertainment.

The deal will add $377 million to rent revenue in the first year after it closes, the company said.

Gaming & Leisure shares were up 33 cents Tuesday afternoon, to $35.10 each. Pinnacle shares rose 22 cents, to $39.97.
 

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