Gaming & Leisure Properties Inc. increased its bid for the casinos owned by Pinnacle Entertainment Inc., with a new offer worth $40 a share, according to a person with knowledge of the plan.
Gaming & Leisure, a Wyomissing, Pennsylvania-based real estate investment trust, gave Pinnacle a deadline of Thursday to accept what would be its final offer, said the person, who wasn’t authorized to speak publicly. The 15 casinos would be owned by Gaming & Leisure, while Pinnacle would continue to run them.
Pinnacle, based in Las Vegas, said last year it was pursuing plans to split into a separate management company and real estate investment trust. Gaming & Leisure, which itself was spun out of Penn National Gaming Inc., disclosed a $36-a-share offer for Pinnacle last month that valued its real estate at $4.1 billion including assumed debt.
A spokesman for Gaming & Leisure at Sard Verbinnen said he couldn’t comment. A spokesman for Pinnacle didn’t respond to a request for comment.
The increased offer was reported earlier by the Wall Street Journal. Pinnacle shares jumped on the report, then dropped, closing down 6 percent to $34.11 in New York trading.
The share drop reflects investors selling Pinnacle shares on the belief the company will reject Gaming & Leisure’s offer, Steven Wieczynski, an analyst at Stifel Nicolaus Capital Markets in Baltimore, said in a research note today. He has a hold rating on the stock.
“We believe the Thursday ultimatum was the driving force behind the weakness in PNK shares into today’s close,” Wieczynski wrote.