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WYOMISSING, PA-Locally-based Penn National Gaming’s planned $8.9-billion sale to a joint venture of Fortress Investment Group LLC and Centerbridge Partners LP has now completed a course of regulatory approvals in the company’s home jurisdiction. However, with reviews pending in six of the states where Penn National operates, the June 15 expiration of the agreement to take the company private may be extended by 120 days.

The Pennsylvania Gaming Control Board on Thursday signed off on the sale, following approval of the agreement by the Pennsylvania Horse Racing Commission a month earlier. At the same time, the PGCB revealed it had approved a change of control of the slots operator license for the Hollywood Casino at Penn National Race Course in Grantville, PA.

Currently held by Mountainview Thoroughbred Racing Association, a Penn National subsidiary, the license will go to PNG Acquisition Co., the Fortress/Centerbridge JV. The license transfer entails payment of a $2.5 million fee to the PGCB, according to a release from the board. A spokesman for Penn National tells GlobeSt.com that the slots license approval was part of the PGCB’s broader approval of the sale to PNG.

“This board intends to make sure the new owners run a first-rate facility that will generate revenue for property tax relief, the local hosting governments and the horse race industry, while providing economic development and living wage jobs in south central Pennsylvania,” says PGCB chairman Mary DiGiacomo Colins in a news release.

In a prepared release from Penn National, the company reports that approvals for the sale agreement are pending before gaming commissions in Illinois, Indiana, Iowa, Louisiana, Maine and Missouri. Regulators in six other states where Penn Gaming operates have already approved the agreement, while no approval of the transaction was required in Colorado or the Canadian province of Ontario. Including Pennsylvania, Penn National operates in 14 states as well as Ontario.

Since consideration of the agreement remains pending before a number of state regulatory authorities, “the company has concluded that it is unlikely that all of the requisite regulatory approvals will be obtained on or prior to June 15, 2008,” according to the release.

Under terms of the agreement, the cash payment to shareholders of $67 per share of common stock is to be increased by $0.0149 per day if the merger does not close by June 15. However, the agreement also allows for the expiration date to be extended by 120 days to Oct. 13, with shareholders receiving written notice. Through its spokesman, Penn National declines to comment on whether this option will be exercised if regulatory approvals are not obtained by June 15.

As previously reported on GlobeSt.com, Penn National shareholders approved the sale last December. Prior to the shareholder vote, the company made several moves to expand its holdings. Among the expansion moves was the $310-million integration of Hollywood Casino at Penn National Race Course. In its first three months of operation following a February opening, the casino produced approximately $41 million in gross terminal revenues on wagers of $475 million, according to figures from the PGCB. Penn National generated a gross profit of $1.03 billion in the 12-month period ending Dec. 31, 2007, according to a company financial statement, and now owns and operates 19 facilities with a total of more than 900,000 sf of gaming floor space and 1,730 hotel rooms.

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