Thank you for sharing!

Your article was successfully shared with the contacts you provided.

WYOMISSING, PA-Penn National Gaming entered into a merger agreement to acquire Alton, IL-based Argosy Gaming Co. for approximately $2.2 billion, including about $805 million in long-term debt. This makes the locally based gaming company the third largest US casino operator, behind MGM Mirage Inc., and Harrah’s Entertainment Inc.

Penn National will acquire all outstanding shares of Argosy for $47 a share. The all-cash price-per-share represents a premium of about 16% over the closing share price of Argosy stock on Nov. 2, and a premium of about 30% over the average closing share price of Argosy over the past 90 days. Penn National obtained a $2.9 billion commitment for senior secured financing from Deutsche Bank, an affiliate of Goldman Sachs and Lehman Brothers, to finance the transaction. Argosy trades as AGY on the NYSE, while Penn National trades as PENN on the Nasdaq.

The combined companies’ annual revenues exceed $2 billion generated from more than 20,000 slot machines and approximately 700,000 sf of casino space. The acquisition essentially doubles Penn National’s revenue.

The seven Argosy properties are: Alton Belle Casino in Alton, IL; Empress Casino in Joliet, IL; Argosy-brand casinos in Riverside, MO, Baton Rouge LA, Sioux City, IA, and Lawrenceburg IN, and its recently acquired Raceway Park in Ohio. Following the acquisition, Penn National will own 13 gaming facilities; four pari-mutual horse racing facilities; seven off-track wagering sites; a 50% interest in a fifth pari-mutual horse racing facility, and a management contract for a casino in Canada.

Calling the merger “an extraordinarily powerful combination,” Peter M. Carlino, Penn National’s chairman and CEO, says it gives his company “a presence in nearly every major regional gaming market. This transaction will enable us to further broaden our revenue base and diversify our cash flow by jurisdiction and by property.” He refers to added in-market opportunities as well as a reach into three new markets and says Penn National “expects to achieve approximately $20 million in corporate cost savings within the first year of closing the transaction,” which is expected to take place in the second half of 2005.

The planned purchase of Argosy follows Penn National’s sale of the Pocono Downs racetrack in Wilkes-Barre, PA and five off-track betting parlors to Mohegan Tribal Gaming Authority for $280 million. The disposition was prompted by Pennsylvania’s new slot machine legislation that prohibits a gaming firm from owning in full more than one slot machine facility in the state. Penn National plans to open a slot facility at its Penn National Race Course in Grantville, PA in early 2006.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.