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BATON ROUGE-Publicly traded Penn National Gaming Inc. will sell the Argosy hotel and casino here for $150 million following the company’s $2.2-billion acquisition of Argosy Gaming Company. Penn National expects to complete both transactions during the third quarter.Argosy’s Baton Rouge hotel and casino includes a three-level riverboat casino, a 300-room Sheraton hotel, four restaurants, 150,000 sf of rentable retail space and 40,000 sf of meeting space. The buyer is Columbia Sussex Corporation, which has provided a $15 million deposit toward the purchase price and has guaranteed the financing for the transaction. Penn National Gaming owns and operates 11 casino and horse racing facilities in nine jurisdictions including West Virginia, Illinois, Louisiana, Mississippi, Pennsylvania, New Jersey, Colorado, Maine and Ontario. Columbia Sussex and its affiliates are one of the largest privately held hotel owners in the country, operating 64 hotels, resorts and casinos in 28 states and overseas.Penn National Gaming has been working with various state gaming boards and the Federal Trade Commission to obtain their required approvals to complete the acquisition of Argosy Gaming Company. The sale of the casino is an attempt to expedite the approvals. Penn National CFO William Clifford was not immediately available Tuesday morning for comment.Penn National says the purchase price for the casino is 8.2 times and 7.4 times the casino’s EBITDA (earnings before interest, taxes, depreciation and amortization) for the trailing twelve month periods ended December 31, 2004 and March 31, 2005, respectively. The net proceeds, about $125 million, will be used to reduce debt. Bear, Stearns & Co. Inc. acted as exclusive financial advisor to Penn National in connection with this transaction. Libra Securities, LLC acted as exclusive financial advisor to Columbia Sussex in connection with this transaction.

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