Penn National Gaming offering public stock

Penn National Gaming announced yesterday that it has priced its underwritten public offering of 14,000,000 shares of its common stock, $0.01 par value per share, at a public offering price of $61.00 per share.

The gross proceeds to the Company from the Offering, before deducting underwriting discounts and other offering expenses, are expected to be approximately $854 million (or approximately $982.1 million if the underwriters in the Offering fully exercise their option to purchase additional shares of common stock as described below).

In addition, the Company has granted the underwriters a 30-day option to purchase up to 2,100,000 of additional shares of its common stock at the public offering price less the underwriting discount in the Offering.

The Company expects to use the net proceeds from the Offering for general corporate purposes, which may include, among other things, investments in long-term growth initiatives, its brick and mortar properties and its omni-channel strategy. Subject to the satisfaction of customary conditions, the Offering is expected to close on September 29, 2020.

Last month, Penn National reported a 2Q loss of $1.69 per share, versus the Street consensus of a loss of $2.06 per share. 2Q revenues of $305.5 million exceeded analysts’ estimates of $249.1 million.

Shares in Penn National have this year increased by a whopping 170%, with the average analyst price target of $59.42 now implying downside potential of about 7.4% to current levels.