Weekly Corporate Growth Report: Penn National Gaming to purchase Hollywood Casino Corp. for 0.76 tim

The Deal: Penn National Gaming Inc. has agreed to acquire Hollywood Casino Corporation for $347.5 million in cash. Under the terms of the agreement, Penn will pay $12.75 for each outstanding share of Hollywood Casino. Penn will also assume about $569 million in Hollywood debt and $136 million in cash and cash equivalents, giving the transaction a total consideration value of approximately $780 million. Shareholders controlling slightly more than half of Hollywood's outstanding shares have agreed to support the deal. The transaction is expected to close in the first half of 2003.

Discussion: Hollywood Casino Corporation owns and operates three casinos, located in Illinois, Mississippi, and Louisiana. The casinos have a a Tinseltown theme, featuring movie memorabilia, celebrity look-alikes, and movie-- themed games, restaurants, and entertainment facilities

Penn National owns or operates casino gaming facilities in West Virginia, Mississippi, Louisiana, and Ontario, Canada. The company also owns two racetracks and 11 off-track wagering facilities in Pennsylvania. Penn has also recently acquired a set of casinos in Colorado.

The merger will create the number seven U.S. public gaming company and is expected to raise Penn's revenue base to more than $1 billion annually. The deal will also increase Penn's presence in the southwestern United States.