|By Suzette Parmley, The Philadelphia
InquirerMcClatchy-Tribune Regional News
Oct. 08, 2010--Penn National Gaming Inc. of Wyomissing said today that it has taken ownership of the M Resort, a hotel casino just off the Las Vegas Strip, for $230.5 million.
The company announced it had purchased all of the casino's debt, as well as $160 million of subordinated debt that was formerly held by MGM Resorts International from Royal Bank of Scotland P.L.C.
The acquisition finally gives Penn National a beachhead in a major market that it has long coveted. Before now, it had no presence in either Las Vegas or Atlantic City -- the nation's two biggest casino meccas.
As the third largest publicly traded gaming company in the United States, the firm is known primarily as a regional operator of racetrack casinos in such states as West Virginia, Pennsylvania and Maryland. The company's signature brand is art deco, Hollywood-themed casinos, such as the one outside Harrisburg. Hollywood Casino Perryville, just off Exit 93 on I-95 in Cecil County, Md., opened just a week ago.
"This transaction represents a great opportunity for Penn National, M Resort, its customers and employees as we address the financial uncertainty and debt burden which has created an overhang on M Resort's operations," Peter M. Carlino, chief executive officer of Penn National, said in a statement today. "The M Resort is a beautiful, fresh, upscale local and destination-oriented casino resort which provides an excellent customer experience."
M Resort is 10 miles from the Strip with access to I-15 and is close to several master-planned communities. The casino opened last year just as visitation to Las Vegas began to slump. It features 390 rooms and more than 92,000 square feet of gambling space.
Earlier this year, Penn National weighed the possibility of taking control of the Fontainebleau Las Vegas, a stalled casino-hotel development on the Strip, but pulled out of the bidding. Billionaire financier Carl Icahn ended up acquiring the property in bankruptcy court.
But the company, with a reputation for having one of the strongest balance sheets in the industry with little debt and strong cash flow, continues to expand. Through a joint venture, Penn National is developing a full casino at Kansas Speedway in Kansas City, Mo., which is anticipated to open in the first half of 2012. It is also developing two casinos in Ohio, also with targeted openings in 2012.
At midafternoon, company shares were priced at $31.71, up 0.85 cents (2.75 percent).
Contact staff writer Suzette Parmley at 215-854-2594 or firstname.lastname@example.org.
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