Shareholders of Pinnacle Entertainment, which owns four casinos in Louisiana, approved a deal Tuesday to sell the company’s real estate assets to a casino property owner.
At the special shareholders meeting, which was held at L’Auberge Baton Rouge, Pinnacle stockholders agreed to sell 14 of its 15 casino properties to Gaming and Leisure Properties Inc. Pinnacle would then lease back the casinos for an initial annual rent of $377 million.
In Louisiana, Pinnacle owns L’Auberge Baton Rouge, L’Auberge Casino Resort in Lake Charles, Boomtown Casino Hotel in New Orleans and Boomtown Casino Hotel in Bossier City.
Gaming and Leisure Properties, based in Pennsylvania, also owns and operates Hollywood Casino Baton Rouge.
“As a result of our transaction, Gaming and Leisure Properties will enhance its geographic and tenant diversification, and almost double its cash rental revenue and leased gaming facilities,” Anthony Sanfilippo, Pinnacle’s chief executive officer, said in a statement. “We are working diligently to obtain the remaining required gaming regulatory approvals in Louisiana, Nevada and Missouri, and anticipate closing the transaction as soon as possible after those are received.”
Under the proposed deal, Pinnacle shareholders would receive about $36 in assets for each share they own, or about $2.17 billion. Including debt, Gaming and Leisure Properties said the deal is worth about $4.1 billion.
Officials with the Louisiana Gaming Control Board said they don’t know when the board will vote on approving the deal because an investigation into the transaction hasn’t been completed.
Unite Here, a labor union that represents 275,000 casino, hotel and food service workers in the U.S. and Canada, has come out against the deal, warning that the sale-leaseback model saddles gambling halls with high rent that will make it difficult for the operators to reinvest in maintenance and other capital expenditures.
Kate O’Neil, of Unite Here, also warned that the deal would give Gaming and Leisure Properties ownership of the land of two of Baton Rouge’s three casinos.
Follow Timothy Boone on Twitter, @TCB_TheAdvocate .