Acquisitions & Hotel Openings

Penn National Gaming Purchases M Resort Debt

October 11, 2010 - Penn National Gaming, Inc. (Nasdaq: PENN) announced today that it has purchased all of The M Resort LLC bank debt, plus $160 million of subordinated debt formerly held by MGM Resorts International, which represents all of the outstanding debt of M Resort, from Bank of Scotland plc, a unit of Lloyds Banking Group, for $230.5 million.

Peter M. Carlino, Chief Executive Officer of Penn National commented, "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. The M Resort is a beautiful, fresh, upscale locals and destination-oriented casino resort which provides an excellent customer experience. M Resort is located ten miles from the Las Vegas Strip with access to I-15 and in close proximity to several master-planned communities.

"M Resort is a unique, differentiated property that we expect will continue to improve its operating results even without the benefit of a rebound in the local Las Vegas economy. Longer-term, the core attributes which contributed to the growth of Las Vegas into one of the world's pre-eminent entertainment destinations including its favorable climate and low taxes, combined with Penn National's growing database of 12 million regional gaming customers, many of whom already visit Las Vegas, will further benefit M Resort and the local economy."

Opened in March 2009, the M Resort Spa Casino is situated on over 90 acres on the southeast corner of Las Vegas Boulevard and St. Rose Parkway. The resort features over 92,000 square feet of gaming space including 1,900 slot machines, 64 table games, 14 poker tables and a race and sports book. M Resort also offers 390 guest rooms and suites, nine restaurants and five destination bars, more than 60,000 square feet of meeting and conference space, a 4,700 space parking facility, a state-of-the-art spa and fitness center and a 100,000 square foot events piazza. M Resort's master plan includes the potential to develop up to one million square feet of retail and a multi-screen digital movie entertainment complex.

Wachtell, Lipton, Rosen & Katz acted as legal advisor, and Miller Buckfire & Co., LLC acted as financial advisor, to Penn National Gaming in connection with the transaction. Katten Muchin Rosenman LLP acted as legal advisor, and The Blackstone Group acted as financial advisor, to Bank of Scotland plc in connection with the transaction.

About Penn National Gaming
Penn National Gaming owns, operates or has ownership interests in gaming and racing facilities with a focus on slot machine entertainment. The Company presently operates twenty-three facilities in sixteen jurisdictions, including Colorado, Florida, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Mississippi, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, West Virginia, and Ontario. In aggregate, Penn National's operated facilities feature over 27,500 gaming machines, over 500 table games, over 2,000 hotel rooms and over one million square feet of gaming floor space.

Penn National Gaming recently opened Maryland's first casino and added table games to its facilities in West Virginia and Pennsylvania. Through a joint venture, Penn National is developing a full casino at Kansas Speedway in Kansas City, which is anticipated to open in the first half of 2012, and is also developing casinos in Toledo and Columbus, Ohio, with openings targeted for 2012. The Company recently agreed to establish a joint venture (subject to final approval by the Texas Racing Commission and the satisfaction of certain other closing conditions) to own and operate pari-mutuel operations in Texas, including the Sam Houston Race Park in Houston, Texas, the Valley Race Park in Harlingen, Texas and a planned racetrack in Laredo, Texas.

Coming Up In The September Online Hotel Business Review


Feature Focus
Hotel Group Meetings for 2015
As the economy continues to improve, hotels are finally luring back business travelers, including those who are participating in group meetings and conventions. According to The Global Business Travel Association, group travel spending has grown 5.3% to $117.1 billion in 2014, a figure that well exceeds previous expectations. Given that group business accounts for as much as 30-40% of total revenues for a hotel operation, this is welcome news indeed. Still, this is no time for complacency. Savvy hoteliers are incorporating new creative ideas into their operations in order to satisfy their clientele and to differentiate themselves for their competition, with the ultimate goal of making meetings easier, more comfortable and even more fun. The emphasis seems to be on making group meetings “less institutional” and “more residential”. One hotel chain has created meeting spaces that are more like lounges than standard conference rooms. Another offers its guests unusual food options like make-your-own trail mix stations and smoothie bars. Still another provides its guests with mobile apps that will let them make requests — from ordering coffee and food to changing the room temperature — without ever leaving the meeting room. Technological innovations are also of paramount concern as meeting planners are demanding that the latest innovations be available to attendees including universal wireless Internet access, videoconferencing capabilities, charging stations, and a secure protected environment in which to conduct proprietary business. Finally, some hotels are offering more breakout rooms in order to encourage smaller and more intimate interchanges among attendees after long group sessions throughout the day. The September Hotel Business Review will examine what some hotels are doing to facilitate this segment of their business and to meet the expectations of their guests.