One of the largest and most influential casino operators in the United States is one step closer to gaining an even bigger share of the gambling market in the country. On Wednesday, Penn National Gaming announced it has secured an approval from the gambling regulator in Missouri in relation to the pending acquisition of Las-Vegas based company Pinnacle Entertainment.
The plans for the takeover were announced back in December 2017, but the $2.8 billion deal had to receive a number of regulatory approvals in order to proceed. In March, Penn National announced the proposed merger was signed off by both the Pennsylvania Gaming Control Board and the West Virginia Lottery Commission. Now, the Missouri Gaming Commission have reviewed the company’s application and all documents filed in connection with the Pinnacle transaction. The regulator has also approved the deal, an August 29 statement reads.
The company has so far received approvals from a total of twelve regulatory bodies, including those in Pennsylvania, West Virginia and now Missouri. It does not say, however, how many regulators and other institutions need to approve the deal. On March 29, shareholders of the two companies voted in favor of the merger, with the remarkable 99 percent of all votes being cast for the proposal. With all these necessary requirements already met, the casino operator hopes it would be able to ink the deal very soon.
Timothy J. Wilmott, Chief Executive Officer of Penn National, believes that they can complete the transaction early in the fourth quarter. This means that October is a possible scenario, although the Federal Trade Commission (FTC) still has not signed off the buyout. Last week, while commenting on the approval received from the Iowa Racing and Gaming Commission, Wilmott did not seem to be concerned with the lack of FTC approval. He mentioned the same time frame planned for the Pinnacle deal. Still, the FTC has expressed concerns regarding anti-trust issues with the $2.8-billion transaction.
Possible Effects from the Merger
The acquisition of Pinnacle Entertainment has been in the works for many months and all goes as planned, the deal would be closed within a couple of months. As suggested by the FTC, the massive transaction of $2.8 billion would have an important influence on the market. The pending decision of the Federal Trade Commission also suggests possible issues with the merger. However, in order to reject Penn National’s application, the federal agency will need to have solid evidence of certain failings.
If the acquisition proceeds and gets completed, however, this would result in a significant increase in Penn National’s influence and market shares. Currently, Pinnacle Entertainment owns and operates a total of 16 gaming facilities in Colorado, Indiana, Iowa, Louisiana, Mississippi, Missouri, Nevada, Ohio, Texas, and Pennsylvania. Penn National Gaming, on the other hand, owns 25 gaming and entertainment venues across the country.
The merger would push the total number of properties operated by Penn National to 41. These 41 gaming and entertainment facilities would provide the company with “greater operational and geographic diversity”, Willmot explains. Merged into a single entity, the two companies will be able to “leverage the strengths” of the two parts, while generating increased value for shareholders.