GLPI bids $4.1bn for Pinnacle's real estate

GLPI bids $4.1bn for Pinnacle's real estate

Wednesday, March 11, 2015 Totally Gaming

Gaming and Leisure Properties (GLPI), a real estate investment trust (REIT) specialising in casino facilities, has submitted an unsolicited offer of $4.1bn (€3.8bn) to acquire the US brick-and-mortar assets of rival operator Pinnacle Entertainment.

Having confirmed the offer in a statement, GLPI said if the transaction were to go ahead, it would create the third largest triple-net REIT by enterprise value.

The offer, which is valued at approximately $36 per share, comes after Pinnacle announced in November that it was planning to separate its operating business and real estate assets.

The proposed deal would adhere to this planned restructure, with Pinnacle’s operating business becoming a separately traded public company (OpCo) and operated by the operator’s current management and board of directors. Meanwhile, Pinnacle’s real estate assets (PropCo) would be merged into GLPI, with the new OpCo entering into a mutually agreeable master lease agreement with the REIT.

“We wholeheartedly agree with Pinnacle's management and board that the separation of Pinnacle's real estate from its operating business is in shareholders' best interests,” GLPI's chairman and chief executive officer, Peter Carlino, said.

“However, four months after announcing its separation plan, Pinnacle has still not provided any specificity regarding its plans, including when, and even whether, it will be able to close, how much equity dilution shareholders will suffer, the financial leverage of each company and the terms of the lease between OpCo and PropCo.

“Our proposal starts with Pinnacle's fundamental decision to separate into two companies and enhances that approach with a better transaction offering certain and superior value to Pinnacle shareholders and doing so much sooner."

Pinnacle has also released a statement in which it acknowledged that it had received an offer from GLPI. However, when contacted by, the operator noted that it would not comment further on the discussions until its board had undertaken a review and evaluation of the bid to determine the best course of action for shareholders.

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