Hollywood, Belterra Casinos Real Estate To Be Owned By Same Company

 By Mike Perleberg The real estate at Belterra Casino Resort in Switzerland County could soon be owned under an agreement between Pinnacle Entertainment and Gaming and Leisure Properties, Inc. (Wyomissing, Pa.) – A company merger announced Tuesday means that Hollywood Casino Lawrenceburg and Belterra Casino Spa & Resort in Switzerland County real estate will be owned by the same company. Gaming and Leisure Properties, Inc., and Pinnacle Entertainment jointly announced that they have entered into a definitive agreement under which GLPI will acquire substantially all of Pinnacle’s real estate assets. The deal approved unanimously by both companies’ board of directors is an all-stock transaction. The combined company will end up owning 35 casinos and hotels across 14 states. Gaming and Leisure Properties owns Hollywood Casino Lawrenceburg and will continue to lease the property to Penn National Gaming. Pinnacle Entertainment will now lease Belterra Casino Resort from GLPI. However, Belterra Park Gaming and Entertainment and the former River Downs horse racing track on Cincinnati’s east side will be spun off into a separately traded public company being called Pinnacle OpCo. The OpCo will still own and maintain the Ohio racino along with 13 other properties across the country. Pinnacle will operate the leased gaming facilities under a triple-net 10-year Master Lease agreement with GLPI that will have five subsequent, five-year extension periods at Pinnacle’s option. Peter Carlino, chairman and CEO of GLPI, says Pinnacle's proven track record of continued improving operating performance will make GLPI even stronger as the company pursues long-term growth. "The combination of these extremely attractive gaming real estate portfolios will create the third largest publicly traded triple-net REIT, with the scale, diversity and financial strength to deliver increased value to both companies' shareholders. Our combined shareholders will benefit from the stable, significant cash flows that we will generate from our long-term lease agreements - along with our commitment to maintaining a strong balance sheet, including an investment grade credit rating that will enable us to pursue future opportunities. We are excited to develop a mutually beneficial, long-term relationship with a quality organization and we look forward to working with them on future additional transaction opportunities," Carlino said. Pinnacle Entertainment CEO Anthony Sanfilippo called the transaction compelling. It unlocks the value of Pinnacle’s real estate assets. “As a premier operator of casino, resort and entertainment properties, Pinnacle will continue to improve its operating efficiency, expand property level margins and pursue growth opportunities that leverage the Company's proven management and development skills. Our Company will be well capitalized and positioned for future growth with pro forma initial year leverage of approximately 3.5x, and have the financial flexibility to capitalize on future value-enhancing opportunities,” Sanfilippo said. GLPI expects the new casinos on its roster to add $377 million in revenues in the first year after the deal is closed. Closing is expected in the first quarter of 2016, regulatory approval notwithstanding. RELATED STORIES: Horseshoe Tops Hollywood In May Casino Revenues; Belterra Sees Bump Belterra Casino Owner Mulling Sale To Penn National Subsidiary