WYOMISSING, Pennsylvania – 12 May, 2020: Penn National Gaming, Inc. (PENN: Nasdaq) (“Penn National” or the “Company”) today announced that it has priced its underwritten public offering of 16,666,667 shares of its common stock, $0.01 par value per share, at a public offering price of $18.00 per share (the “Common Stock Offering”) and its underwritten public offering of $300 million aggregate principal amount of 2.75% Convertible Senior Notes due 2026 (the “Convertible Notes” and such offering, the “Convertible Notes Offering”). The size of the Common Stock Offering was increased from the previously announced $250 million of common stock of the Company, and the aggregate principal amount of the Convertible Notes Offering was increased from the previously announced $250 million. The gross proceeds to the Company from the Common Stock Offering and the Convertible Notes Offering, before deducting underwriting discounts and other offering expenses, are expected to be approximately $600 million (or approximately $690 million if the underwriters in the offerings fully exercise their options to purchase additional shares of common stock and Convertible Notes as described below).
In addition, the Company has granted the underwriters a 30-day option to purchase up to 2,500,000 of additional shares of its common stock at the public offering price less the underwriting discount in the Common Stock Offering (reflecting an increase from the previously announced option of up to $37.5 million additional shares of common stock) and a 30-day option to purchase up to $45 million aggregate principal amount of additional Convertible Notes, solely to cover over-allotments, in the Convertible Notes Offering (reflecting an increase from the previously announced option of up to $37.5 million aggregate principal amount of additional Convertible Notes).
The Convertible Notes will be convertible by holders if certain conditions are met, and during certain periods, based on an initial conversion rate of 42.7350 shares of common stock per $1,000 principal amount of the Convertible Notes, which is equivalent to a conversion price of approximately $23.40 per share, representing a premium of 30.0% above the offering price per share in the Common Stock Offering. The Company will settle conversions of the Convertible Notes in cash, shares of common stock, or a combination thereof at the Company’s election. The Company expects to use the net proceeds from the Common Stock Offering and the Convertible Notes Offering for general corporate purposes that will significantly enhance our liquidity while providing the company with the flexibility to invest in our long term growth initiatives. Subject to the satisfaction of customary conditions, the offerings are expected to close on May 14, 2020. Neither of the closings of the Common Stock Offering or the Convertible Notes Offering is conditioned upon the closing of the other offering.
Goldman Sachs & Co. LLC and BofA Securities are acting as joint book-running managers and representatives of the underwriters, and J.P. Morgan, Fifth Third Securities and Wells Fargo Securities are also serving as book-running managers for the Common Stock Offering and the Convertible Notes Offering. Barclays, BTIG, Citizens Capital Markets, Macquarie Capital, Morgan Stanley, Stifel, SunTrust Robinson Humphrey and TD Securities are acting as co-managers for the Common Stock Offering. Barclays, Citizens Capital Markets, Macquarie Capital, Morgan Stanley, Stifel, SunTrust Robinson Humphrey, TD Securities and US Bancorp are acting as co-managers for the Convertible Notes Offering. A shelf registration statement relating to these securities has been filed with the U.S. Securities and Exchange Commission (“SEC”) and has become effective. Each of the Common Stock Offering and the Convertible Notes Offering may be made only by means of a prospectus supplement and an accompanying base prospectus. The preliminary prospectus supplements and accompanying base prospectus relating to each of the Common Stock Offering and the Convertible Notes Offering will be filed with the SEC and will be available on the SEC’s website at www.sec.gov. Copies of the preliminary prospectus supplements and accompanying base prospectus relating to the Common Stock Offering and the Convertible Notes Offering may be obtained from Goldman Sachs & Co. LLC, 200 West Street, New York, New York 10282, Attention: Prospectus Department, by telephone at (866) 471-2526, or by email at prospectus-ny@ny.email.gs.com or BofA Securities, NC1-004-03-43, 200 North College Street, 3rd floor, Charlotte NC 28255-0001, Attention: Prospectus Department, or via email: dg.prospectus_requests@bofa.com.
This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any share of common stock, any Convertible Notes or any other security and shall not constitute any offer, solicitation or sale in any jurisdiction in which such offer, solicitation, purchase or sale is unlawful. Before investing, please read the applicable prospectus supplement and accompanying base prospectus and other documents Penn National has filed with the SEC for more complete information about Penn National.
About Penn National Gaming
Penn National Gaming owns, operates or has ownership interests in 41 gaming and racing properties in 19 jurisdictions and video gaming terminal operations with a focus on slot machine entertainment. We also offer live sports betting at our properties in Indiana, Iowa, Michigan, Mississippi, Pennsylvania and West Virginia. In total, Penn National’s properties feature approximately 50,000 gaming machines, 1,300 table games and 8,800 hotel rooms. In addition, the Company operates an interactive gaming division through its subsidiary, Penn Interactive Ventures, LLC, which launched iCasino in Pennsylvania and, through strategic partnerships, operates online sports betting in Indiana, Pennsylvania and West Virginia. The Company also has a leading customer loyalty program, mychoice, with over five million active customers.
