LAS VEGAS—In an effort to maximize long-term shareholder value,the board of directors of Pinnacle EntertainmentInc. has green-lighted the firm's plan to split itsoperating and real estate assets into two publicly tradedcompanies. According to a Bloomberg report, the decisionwas driven in part by pressure from Orange CapitalLLC, an activist investor in PNK.

To facilitate the separation, Pinnacle will create a newlyformed, publicly traded REIT that will be distributed to PNKstockholders in a tax-free spin-off. PNK, meanwhile will remain asthe operating entity. Pinnacle owns and operates 15 gamingentertainment properties in Colorado, Indiana, Iowa, Louisiana,Mississippi, Missouri, Nevada and Ohio. It also holds a majorityinterest in the racing license owner, as well as a managementcontract, for Retama Park Racetrack outside of San Antonio, TX.

While a “significant” amount work remains to be done to completethe spinoff, the move will provide a lower weighted average cost ofcapital and an attractive financial platform to take advantage offuture opportunities in both the casino gaming industry and thebroader leisure and entertainment sector, relates Pinnacle CEOAnthony M. Sanfilippo.