Casino News

Penn National Gaming in Merger Courtship with Pinnacle Entertainment

The long-held rumors that U.S. casino operator Penn National Gaming Inc aims at consolidating its business with that of Pinnacle Entertainment Inc has been confirmed as true. The gambling industry woke up to the news that Pinnacle Entertainment is discussing a potential merger with Penn National amid a flurry of mergers and acquisitions. In a statement released yesterday, Penn National stated that the potential merger with Pinnacle Entertainment would be based on a cash-and-stock transaction.

Penn National Gaming Inc. announced that it is hoping to continue its shopping spree with the acquisition of Pinnacle Entertainment. Penn National had a modest start as a regional gaming operator in Pennsylvania. Over the years, the company managed to grow, so that currently it operates 29 gaming facilities in 17 US states and in Canada. A key factor for the company’s year-on-year increase was, and still is, the fact that Penn National purchased a number of other companies to grow its market share and crack into new regulated markets.

Over the past few years, Penn National was in a merger hunt. In 2015, the company purchased its second Las Vegas casino, the Tropicana. As it can be recalled, in March this year, Penn National purchased Bally’s Casino Tunica Resorts and two Mississippi casinos. Penn also acquired San Francisco-based social casino games company Rocket Games for a total price of $110 million.

Penn National Continues with Its Shopping Spree

At present, it seems that Penn is still in the hunt for merger deals. According to the latest news, the company is in talks with Pinnacle Entertainment to buy the latter in a cash-and-stock deal. Pinnacle Entertainment is currently operating 16 gambling properties, the most popular of which the Meadows Casino in Washington, Pennsylvania and Boomtown Casino Hotel in New Orleans.

Supposing that the two companies reach a deal and exchange signatures, Pinnacle is to assume control over Penn’s gambling venues. In that way, Pinnacle will be able to increase its company’s breadth and open new horizons for development. Apart from that, the potential acquisition of Penn increased Pinnacle’s value on the stock market. It was reported that the company’s price per share increased up to 40.3%, while Penn’s price jumped to 25% per share.

Merger and acquisition activity within the global gambling industry is a surging trend, which is expected to continue over the next coming years. The reason for this is more than clear – consolidation between companies helps them to bolster their positions on the market. It is not a secret that the competition between the industry-involved companies is fierce as the market is over-saturated. Hence, companies should be flexible and innovative in order to overcome any hurdles and survive on the market.