Pinnacle Entertainment got the go-ahead from its shareholders to proceed with a .1 billion sale-leaseback of its gaming properties.
Shareholders approved the sale during a special shareholders meeting earlier this month, which was held to discuss selling the firm’s real estate assets in 14 of its 15 casino properties in three states to Gaming and Leisure Properties.
The deal requires Pinnacle to spin off its operating business and its Belterra Park Gaming & Entertainment Center into a separately traded public company, while Gaming and Leisure Properties holds the real estate assets.
Pinnacle must obtain regulatory approval in Nevada, Louisiana, and Missouri before concluding the sale.
“Gaming and Leisure Properties will enhance its geographic and tenant diversification, and almost double its cash rental revenue and leased gaming facilities,” Pinnacle CEO Anthony Sanfilippo said in a statement.
“We are working diligently to obtain the remaining required gaming regulatory approvals in Louisiana, Nevada and Missouri, and anticipate closing the transaction as soon as possible after those are received.”
After selling the assets to Gaming and Leisure, Pinnacle wants to lease them back by paying $377 million per year. The deal would include all four of Pinnacle Entertainment’s casinos in Louisiana – the Boomtown Casino Hotel in New Orleans and its sister casino in Bossier City, and the L’Auberge Baton Rouge and L’Auberge Casino Resort in Lake Charles.
Pennsylvania-based Gaming and Leisure Properties already owns and runs the Hollywood Casino Baton Rouge.
If completed, the deal would pay about $36 per share to Pinnacle shareholders, for a total of $2.17 billion of the estimated $4.1 billion deal.
Opposing the sale is the UNITE HERE labor union, which says Gaming and Leisure Properties would own three of four Baton Rouge casinos, and the sale-leaseback sale would force Pinnacle to pay a rent amount that makes it too hard to maintain and improve the properties.
Pinnacle did not indicate whether it or Gaming and Leisure would be responsible for property maintenance and improvements.
