WYOMISSING, Pa.--(BUSINESS WIRE)--Jan. 6, 2017--
Penn National Gaming, Inc. (PENN: Nasdaq) (“Penn”) announced today that
it is commencing a cash tender offer for any and all of the $300 million
aggregate outstanding principal amount of its 5.875% senior notes due
2021 (CUSIP No. 707569 AR0).
The tender offer will expire at 5:00 p.m., New York City time, on
January 18, 2017, unless the tender offer is extended or earlier
terminated (such time and date, as they may be extended, the “Expiration
Date”). Under the terms and subject to the conditions of the tender
offer, holders of notes who validly tender (and do not validly withdraw)
their notes at or prior to the Expiration Date (or who validly deliver a
properly completed and duly executed Notice of Guaranteed Delivery in
accordance with the instructions described in the Offer to Purchase at
or prior to the Expiration Date and subsequently deliver their tendered
notes by the close of business on January 20, 2017, the second business
day after the scheduled Expiration Date), and, in each case, whose
tendered notes are accepted for purchase by Penn in the tender offer,
will receive cash consideration of $1,045.45 per $1,000 principal amount
of tendered notes plus any accrued and unpaid interest from and
including the most recent interest payment date, up to, but excluding,
the settlement date for the tender offer. Tendered notes may be validly
withdrawn at any time at or prior to the Expiration Date or as otherwise
set forth in the Offer to Purchase for the tender offer.
The settlement date in respect of notes that are validly tendered at or
prior to the Expiration Date and accepted by Penn for purchase in the
tender offer will be promptly after the Expiration Date and is expected
to be January 19, 2017, the first business day following the scheduled
Expiration Date. The settlement date in respect of tendered notes with
respect to which a properly completed and duly executed Notice of
Guaranteed Delivery is validly delivered at or prior to the Expiration
Date (to the extent that such notes are not delivered at or prior to the
Expiration Date) that are accepted by Penn for purchase in the tender
offer is expected to be January 23, 2017, the third business day
following the scheduled Expiration Date.
The tender offer is being made pursuant to the Offer to Purchase dated
January 6, 2017, a related Letter of Transmittal and a related Notice of
Guaranteed Delivery (as they may be amended or supplemented from time to
time, the “Tender Offer Documents”), which more fully set forth the
terms and conditions of the tender offer, and the information in this
press release is qualified in its entirety by such documents. See
“Information Relating to the Tender Offer” below.
In addition, Penn today delivered a conditional notice of redemption
with a redemption date of February 6, 2017, as it may be extended
pursuant to the indenture, for any and all notes outstanding as of the
redemption date. The redemption is conditioned upon the satisfaction of
the Financing Condition described below and the other conditions set
forth therein. It is Penn’s current intention to effect the satisfaction
and discharge of the indenture governing the notes concurrently with or
following the settlement date and to redeem on the redemption date any
notes that are not tendered and accepted for purchase pursuant to the
tender offer, assuming the Financing Condition is satisfied. Any
redemption would be made solely pursuant to the notice of redemption,
including subject to the conditions set forth therein, delivered
pursuant to the indenture governing the notes and the information in
this press release is qualified in its entirety by such notice.
The tender offer is being undertaken in connection with a proposed
refinancing by Penn of the notes as well as its existing credit
facilities. As part of that refinancing, Penn is seeking, subject to
market and other conditions, to (i) complete new unsecured debt
financing that would rank pari passu with the notes in an
aggregate amount sufficient to fund the cash consideration in the tender
offer together with accrued and unpaid interest in respect of all of the
outstanding notes (assuming that all outstanding notes are tendered),
and (ii) enter into amended senior secured credit facilities, in an
anticipated aggregate amount of $1,500 million, expected to be comprised
of a five-year $700 million revolving credit facility, a five-year $300
million term loan A facility and a seven-year $500 million term loan B
facility, and to include, among other things, amendments to permit the
new unsecured debt financing and the purchase of all outstanding notes
pursuant to the tender offer and the redemption. Penn intends to use the
proceeds of the unsecured debt financing to fund the tender offer, the
satisfaction and discharge of the indenture governing the notes, the
redemption on the redemption date of any notes that are not tendered and
accepted for purchase pursuant to the tender offer and related
transaction fees and expenses. Penn intends to use the portion of the
revolving credit facility drawn or utilized on the closing date of the
refinancing, the term loan facilities, any remaining net proceeds from
the unsecured debt financing and other cash on hand to refinance its
existing credit facilities, fund related transaction fees and expenses
and for general corporate purposes. Penn’s entering into the amended
credit facilities is subject to regulatory approvals and other customary
conditions, and Penn’s completion of the unsecured debt financing also
is subject to Penn’s entering into the amended credit facilities and
other customary conditions. We also may choose, depending on market
conditions, to allocate the respective dollar amounts differently among
the tranches of financing, including to have a greater or lesser amount
of the unsecured debt financing and a correspondingly lesser or greater
amount of term loan B financing.
Each of the tender offer and the conditional redemption is subject to
the condition (the “Financing Condition”) that (i) Penn has completed
the unsecured debt financing transaction on terms reasonably
satisfactory to Penn resulting in net proceeds to Penn that are
sufficient to fund (a) the cash consideration in the tender offer
together with accrued and unpaid interest from and including the most
recent interest payment date and up to, but not including, the
settlement date for the tender offer, in respect of all of the notes,
(b) the satisfaction and discharge of the indenture governing the notes
and the related redemption with respect to any notes not tendered and
accepted for purchase pursuant to the tender offer and (c) related
transaction fees and expenses, and (ii) Penn has entered into the
amended credit facilities on terms reasonably satisfactory to Penn,
including terms that permit the unsecured debt financing and the
purchase of all outstanding notes pursuant to the tender offer and the
redemption. The tender offer also is subject to other customary
conditions. However, there is no condition that a minimum principal
amount of notes be tendered in the tender offer.
If the Financing Condition or any of the conditions to the tender offer
is not satisfied, Penn is not obligated to accept for payment, purchase
or pay for, and may delay the acceptance for payment of, any tendered
notes and may terminate the tender offer. Penn also reserves the right
to extend the Expiration Date or to otherwise withdraw and not complete
the tender offer.
In addition, if the Financing Condition is not satisfied, Penn is not
obligated to redeem any of the notes and may revoke the conditional
redemption notice.
This press release is for informational purposes only and does not
constitute a notice of redemption under the optional redemption
provisions of the indenture governing the notes, nor does it constitute
an offer or solicitation to sell or buy any security. No such offer or
solicitation will be made in any jurisdiction in which such offer or
solicitation would be unlawful.
Information Relating to the Tender Offer
J.P. Morgan will act as Dealer Manager for the tender offer. Questions
regarding the terms of the tender offer may be directed to J.P. Morgan,
toll-free at (800) 245-8812. Ipreo, LLC will act as the Information
Agent for the tender offer. The Tender Offer Documents may be obtained
from Ipreo, LLC, free of charge, by calling toll-free at (888) 593-9546
(bankers and brokers can call collect at (212) 849-3880) or downloaded
from https://www.debtdomain.com/public/penn/index.html.
The full details of the tender offer, including complete instructions on
how to tender notes, are included in the Tender Offer Documents. Holders
are strongly encouraged to read carefully the Tender Offer Documents,
including materials incorporated by reference therein, because they will
contain important information.
None of Penn, its management or board of directors, the dealer manager,
the depositary, the information agent or the trustee with respect to the
notes or their respective affiliates makes any recommendation to any
holder as to whether to tender any notes in connection with the tender
offer, or has authorized any person to give any information or to make
any representation in connection with the tender offer other than the
information and representations contained in this Tender Offer
Documents. If anyone makes any recommendation or representation or gives
any such information, you should not rely upon that recommendation,
information or representation as having been authorized by Penn, its
management or board of directors, the dealer manager, the depositary,
the information agent or the trustee with respect to the notes. Each
holder must make its own decision as to whether or not to tender its
notes and, if so, the principal amount of notes to tender.
About Penn National Gaming
Penn is a leading, diversified, multi-jurisdictional owner and manager
of gaming and racing facilities and video gaming terminal (“VGT”)
operations. Penn has also recently expanded into social online gaming
offerings via its Penn Interactive Ventures, LLC division and Penn’s
recent acquisition of Rocket Speed, Inc. (formerly known as Rocket
Games, Inc., (“Rocket Speed”)). Penn currently owns, manages, or has
ownership interests in twenty-seven facilities in the following
seventeen jurisdictions: California, Florida, Illinois, Indiana, Kansas,
Maine, Massachusetts, Mississippi, Missouri, Nevada, New Jersey, New
Mexico, Ohio, Pennsylvania, Texas, West Virginia, and Ontario, Canada.
Forward-Looking Statements
This press release and the documents referred to herein include “forward
looking statements,” including statements about the tender offer and the
conditional redemption, the satisfaction and discharge of the indenture
governing the notes and the anticipated refinancing transactions. We can
give no assurances that we will enter into the amended credit facilities
or complete the unsecured debt financing in the respective amounts, on
the proposed terms or at all. These statements can be identified by the
use of forward-looking terminology such as “expects,” “believes,”
“estimates,” “projects,” “intends,” “plans,” “seeks,” “may,” “will,”
“should” or “anticipates” or the negative or other variation of these or
similar words, or by discussions of future events, strategies or risks
and uncertainties. Actual results may vary materially from expectations.
Although Penn believes that its expectations are based on reasonable
assumptions, within the bounds of its knowledge of its business, there
can be no assurance that actual results will not differ materially from
Penn’s expectations, and accordingly, Penn’s forward-looking statements
are qualified in their entirety by reference to the factors described in
the Penn’s Annual Report on Form 10-K for the year ended December 31,
2015, subsequent Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K as filed with the Securities and Exchange Commission (the
“SEC”). Meaningful factors that could cause actual results to differ
materially from the forward-looking statements include, without
limitation, risks related to the following: the ability of Penn’s
operating teams to drive revenue and adjusted EBITDA margins; the impact
of significant competition from other gaming and entertainment
operations; Penn’s ability to obtain timely regulatory approvals
required to own, develop and/or operate its facilities, or other delays,
approvals or impediments to completing its planned acquisitions or
projects, such as construction factors, including delays, unexpected
remediation costs, local opposition, organized labor, and increased cost
of labor and materials; the passage of state, federal or local
legislation (including referenda) that would expand, restrict, further
tax, prevent or negatively impact operations in or adjacent to the
jurisdictions in which Penn does or seeks to do business (such as a
smoking ban at any of its facilities); the effects of local and national
economic, credit, capital market, housing, and energy conditions on the
economy in general and on the gaming and lodging industries in
particular; the activities of Penn’s competitors and the rapid emergence
of new competitors (traditional, internet, social, sweepstakes based and
VGTs in bars, truck stops and other retail establishments); increases in
the effective rate of taxation at any of Penn’s properties or at the
corporate level; Penn’s ability to identify attractive acquisition and
development opportunities (especially in new business lines) and to
agree to terms with, and maintain good relationships with
partners/municipalities for such transactions; the costs and risks
involved in the pursuit of such opportunities and Penn’s ability to
complete the acquisition or development of, and achieve the expected
returns from, such opportunities; Penn’s ability to maintain market
share in established markets and ramp up operations at its recently
opened facilities; Penn’s expectations for the continued availability
and cost of capital; the impact of weather; the outcome of pending legal
proceedings; changes in accounting standards; the risk of failing to
maintain the integrity of Penn’s information technology infrastructure
and safeguard its business, employee and customer data; risks relating
to the remediation of our material weaknesses and the costs to
strengthen Penn’s internal control structure; Penn’s ability to generate
sufficient future taxable income to realize its deferred tax assets;
with respect to the recently opened Hollywood Casino Jamul-San Diego,
particular risks associated with the repayment or subordination of
project loans, sovereign immunity, local opposition (including several
pending lawsuits), access, regional competition and property
performance; with respect to Penn’s Plainridge Park Casino in
Massachusetts, the ultimate location and timing of the other gaming
facilities in the state and the region; with respect to Penn’s social
and other interactive gaming endeavors, including its recent acquisition
of Rocket Speed, risks related to the social gaming industry, employee
retention, cyber-security, data privacy, intellectual property and legal
and regulatory challenges, as well as Penn’s ability to successfully
develop innovative new games that attract and retain a significant
number of players in order to grow Penn’s revenues and earnings; with
respect to Illinois Gaming Investors, LLC, d/b/a Prairie State Gaming,
risks relating to recent acquisitions of additional assets and the
integration of such acquisitions, Penn’s ability to successfully compete
in the VGT market, its ability to retain existing customers and secure
new customers, risks relating to municipal authorization of VGT
operations and the implementation and the ultimate success of the
products and services being offered; and other factors discussed in
Penn’s filings with the SEC. All subsequent written and oral forward
looking statements attributable to Penn or persons acting on Penn’s
behalf are expressly qualified in their entirety by the cautionary
statements included in this press release. Penn undertakes no obligation
to publicly update or revise any forward looking statements contained or
incorporated by reference herein, whether as a result of new
information, future events or otherwise, except as required by law. In
light of these risks, uncertainties and assumptions, the forward looking
events discussed in this press release may not occur.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170106005377/en/
Source: Penn National Gaming, Inc.
Penn National Gaming, Inc.
William J. Fair
Chief Financial
Officer
610-373-2400
or
JCIR
Joseph N. Jaffoni,
Richard Land
212-835-8500
penn@jcir.com
