Gaming and Leisure Properties Inc. (GLPI) has finally succeeded in reaching a deal to buy the real estate assets from casino operator Pinnacle Entertainment Inc. (PNK). The roughly $4.75 billion, all-stock transaction, comes after an activist investor urged Pinnacle to separate real estate assets and take other shareholder-friendly steps. The deal comes after Gaming and Leisure Properties in March made a hostile $4.1 billion bid for the Pinnacle real estate assets. After being rebuffed, Gaming and Leisure subsequently hiked its offer earlier this month. Pinnacle has also been under public pressure since April 2014 from activist investor Orange Capital LLC’s Daniel Lewis, who then urged the company to consider separating its real estate assets from its operating business by creating a free-standing REIT. In November, Pinnacle announced that it was going to do just that and the plan was to have the REIT shares distributed to the company’s shareholders in a tax-free spinoff with a 2016 completion date. Instead, Pinnacle’s board unanimously approved a combination that proponents are saying will create the third largest publicly-traded REIT in the U.S. As part of the deal, Pinnacle shareholders will receive 0.85 Gaming and Leisure Properties common shares for each Pinnacle share for the property company.
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