PENN NATIONAL GAMING,INC. (NASDAQ:PENN) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry Into a Material Definitive Agreement.
On December17, 2017, Penn National Gaming,Inc. (“Penn”), Franchise Merger Sub,Inc., a wholly owned subsidiary of Penn (“Merger Sub”), and Pinnacle Entertainment,Inc. (“Pinnacle”) entered into an Agreement and Plan of Merger (the “Merger Agreement”), to which Merger Sub will merge with and into Pinnacle, with Pinnacle continuing as the surviving corporation (the “Merger”).
In connection with the Merger, on December17, 2017, Penn, Boyd Gaming Corporation (“Boyd”) and Boyd TCIV, LLC, a wholly owned subsidiary of Boyd (“Boyd Purchaser”), entered into a Membership Interest Purchase Agreement (the “Divestiture Agreement”), to which Boyd Purchaser will acquire the membership interests of certain Pinnacle subsidiaries (such subsidiaries, the “Divestiture Subsidiaries”) which operate the casinos known as Ameristar Casino Resort Spa St. Charles (Missouri), Ameristar Casino Hotel Kansas City (Missouri), Belterra Casino Resort (Indiana), and Belterra Park (Ohio) (the “Divestiture Transaction”). At or prior to the completion of the Divestiture Transaction, Boyd Purchaser will enter into a “triple net” Master Lease (the “Boyd Master Lease”) with Gold Merger Sub, LLC (“Gold Merger Sub”), a subsidiary of Gaming and Leisure Properties,Inc. (“GLPI”), for the lease of the real property interests related to the operations of the acquired casinos.
To facilitate the transactions contemplated by the Merger Agreement and Divestiture Agreement, on December17, 2017, Penn also entered into: (1)a Purchase Agreement (the “Belterra Park Real Estate Purchase Agreement”) with Gold Merger Sub, to which Gold Merger Sub will acquire the real estate associated with Pinnacle’s Belterra Park casino in Cincinnati, Ohio; (2)a Purchase Agreement (the “Plainridge Real Estate Purchase Agreement”) with Gold Merger Sub to which Gold Merger Sub will acquire the real estate associated with Penn’s Plainridge Park Casino in Plainville, Massachusetts, which real estate, at the closing of the transactions, will be leased to Pinnacle’s tenant subsidiary, Pinnacle MLS, LLC (“Pinnacle Tenant”), to an amendment (the “Pinnacle Amendment”) to the Master Lease, dated as of April28, 2016, by and between Gold Merger Sub and Pinnacle Tenant (as amended, the “Pinnacle Master Lease”); (3)a Master Lease Commitment and Rent Allocation Agreement (“Rent Allocation Agreement”) with Boyd, Boyd Purchaser, GLPI and Gold Merger Sub, to which the parties thereto agreed to, among other matters, the allocation of rent to be paid by Boyd Purchaser and Pinnacle Tenant following consummation of the Divestiture Transaction under the Boyd Master Lease and the Pinnacle Amendment, respectively; and (4)a Consent Agreement with GLPI and certain of its wholly owned landlord subsidiaries (including Gold Merger Sub, PA Meadows, LLC, WTA II,Inc., CCR Pennsylvania Racing,Inc.) and Pinnacle and certain of its wholly owned tenant subsidiaries (including Pinnacle Tenant and PNK Development 33, LLC), to which Gold Merger Sub has provided its consent to the Divestiture Transaction (the “Consent Agreement” and, together with the Merger Agreement, the Divestiture Agreement, the Belterra Park Real Estate Purchase Agreement, the Plainridge Real Estate Purchase Agreement and the Rent Allocation Agreement, the “Transaction Documents”).