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Casino operator Penn National sold for $6.1B

/ Source: The Associated Press

Casino operator Penn National Gaming Inc. said Friday it agreed to be purchased by Fortress Investment Group LLC and Centerbridge Partners LP for about $6.1 billion in cash.

The deal also includes the assumption of approximately $2.8 billion in Penn National outstanding debt.

Penn National shareholders will receive $67 in cash for each share they own, about a 31 percent premium over the company's closing price of $51.14 on Thursday.

Penn National has about 85.5 million shares outstanding.

The agreement allows Penn National to solicit superior proposals from other parties during the 45 days following the execution of the agreement. It also allows for the purchase price to be increased by 1.49 cents per share per day if the transaction is not consummated by June 15, 2008.

The company's board is recommending shareholders approve the transaction.

Certain members of Penn National's management team, including Chairman and Chief Executive Peter Carline and Chief Financial Officer William Clifford, are expected to stay with the company.

The deal does not include a financing condition.

The acquisition is expected to close in about 12 to 16 months, subject to customary closing conditions, such as shareholder approval and state gaming and racing authority approvals.