New high roller at the table, Penn buys Pinnacle for $2.8B

Pinnacle Entertainment is being snapped up by Penn National in a deal worth about $2.8 billion as the gaming industry seeks to diversify and cut costs at the same time.

Penn National Gaming Inc. is spending $20 in cash for each share, and Pinnacle shareholders will also get 0.42 shares of Penn for each Pinnacle share they own. The stock-and-cash bid is worth an implied $32.47 per share, the companies said.

As part of the deal, Boyd Gaming Corp. is buying four of Penn National's newly acquired properties. Those include the Ameristar St. Charles and the Ameristar Kansas City, both in Missouri, as well as the Belterra Casino Resort in Florence, Indiana, and Belterra Park in Cincinnati. Boyd will pay $575 million for those assets.

Penn says the combined company will have 41 properties in North America, not including those acquired by Boyd. The company also expects about $100 million in annual cost savings as a result of the deal.

"The combined company will benefit from enhanced scale, additional growth opportunities and best-in-class operations, creating a more efficient integrated gaming company," said Penn CEO Timothy J. Wilmott.

In morning trading, Pinnacle Entertainment shares added 32 cents to $31.27. Penn National shares dipped 32 cents to $29.37, and Boyd Gaming shares rose $1.46, or 4.5 percent, to $33.78.