WYOMISSING PA, and LAS VEGAS—Gaming and Leisure Properties Inc. and Pinnacle Entertainment Inc. said Tuesday they had entered a definite agreement for GLPI to buy substantially all of PNK's real estate assets in an all-stock transaction. The deal, which gives PNK an enterprise value of about $4.75 billion, comes two weeks after GLPI upsized its bid for PNK's real estate.

The agreement calls for PNK's operating business and the real property of Belterra Park Gaming & Entertainment will be spun off into a separately traded OpCo, with the PropCo's real estate assets being acquired by GLPI. PNK shareholders will receive a fixed-exchange ratio of 0.85 GLPI common shares per PNK share for PropCo, along with one share of OpCo common stock for each PNK share.

“Pinnacle's real estate portfolio brings great properties to GLPI and adds one of the leading gaming operators as a new tenant,” says Peter Carlino, chairman and CEO of GLPI. He adds that PNK's history of “continued improving operating performance” will make his company “even stronger as we pursue long-term growth.” The combined company will have 35 casino and hotel assets across 14 states.

Carlino says the combination of these “extremely attractive gaming real estate portfolios” will create the third largest publicly traded triple-net lease REIT, “with the scale, diversity and financial strength to deliver increased value to both companies' shareholders. Our combined shareholders will benefit from the stable, significant cash flows that we will generate from our long-term lease agreements—along with our commitment to maintaining a strong balance sheet, including an investment grade credit rating that will enable us to pursue future opportunities.”

Morgan Stanley, BofA Merrill Lynch and J.P. Morgan Securities LLC are acting as financial advisors and Wachtell, Lipton, Rosen & Katz is acting as legal advisor to GLPI. On the PNK side, Goldman Sachs is acting as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP and Gibson, Dunn & Crutcher LLP are serving as legal advisors.