{"id":326239,"date":"2024-07-25T22:20:15","date_gmt":"2024-07-26T03:20:15","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=326239"},"modified":"2024-07-26T09:57:05","modified_gmt":"2024-07-26T14:57:05","slug":"boyd-gaming-open-to-ma-execs-evasive-on-penn-rumor","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/boyd-gaming-open-to-ma-execs-evasive-on-penn-rumor\/","title":{"rendered":"Boyd Gaming Open to M&A, Execs Evasive on Penn Rumor"},"content":{"rendered":"

Boyd Gaming (NYSE: BYD) executives said they\u2019re open to acquisitions, but they didn\u2019t specifically mention Penn Entertainment (NASDAQ: PENN) on their company\u2019s second-quarter earnings conference call on Thursday evening.<\/p>\n

\"Boyd
Keith Smith, president and CEO of Boyd Gaming said the company is open to M&A, but didn’t mention Penn Entertainment. (Image: Bizuayehu Tesfaye\/Review-Journal<\/em>\/Boyd Gaming\/Casino.org<\/em>)<\/figcaption><\/figure>\n

There was no direct mention of Penn on the call. Speculation that Penn is a takeover target<\/a> has intensified since late May when investor the Donerail Group wrote a letter to the regional casino operator\u2019s board of directors, excoriating them for allowing costly missteps in online sports betting and not adequately capitalizing on land-based casinos. The shareholder also advocated for a sale.<\/p>\n

On June 20, reports surfaced that Boyd was mulling a takeover bid of at least $9 billion<\/a> for its rival, but since then, neither company has confirmed takeover talks, nor has Penn expressed interest in selling. Boyd CEO Keith Smith acknowledged that the company\u2019s growth has been aided by smart acquisitions.<\/p>\n

I think we’ve developed a great expertise at it. We know how to buy properties right, companies right, we know how to extract value out of these companies once they’re part of our portfolio,\u201d Smith said on the call in response to a question from Stifel analyst Steven Wieczynski. \u201cLook, we’ve always been willing, it’s not new news, to take a hard look at opportunities that arise. And so, we’ll continue to do that.\u201d<\/p><\/blockquote>\n

Wall Street analysts have widely noted that Boyd acquiring Penn is highly unlikely, but the rumor lives on and is a significant part of the reason shares of Penn rallied in June.<\/p>\n

How Boyd Could Afford Penn<\/h2>\n

How Boyd could finance any acquisition, whether it\u2019s for a single venue or an entire company, depends \u201con the specific facts and circumstances around the transaction,\u201d added Smith. CFO Josh Hirsberg said the operator has specific long-term leverage targets it wants to meet.<\/p>\n

\u201cTo the extent that we were to leverage up to do some sort of transaction or pursue some sort of opportunity, whether it was a development opportunity or acquisition or anything of that nature, we have set a long-term leverage target of to be below 3 times traditional leverage in the neighborhood of where we are today,\u201d said the Boyd financial boss in response to the Wieczynski question. \u201cAnd so, we would have the objective of getting back to that level very quickly.\u201d<\/p>\n

\n

Previously, some analysts scoffed at the notion that Boyd would offer $9 billion or more for Penn. If the former does make a move for the latter, one analyst theory is that it would be for around $25 to $30 a share<\/a>. Based on Penn\u2019s 151.55 million shares outstanding, a $30 per share offer values the Ameristar operator at $4.54 billion.<\/p>\n<\/div>\n

Although that\u2019s a healthy premium to Penn\u2019s closing market capitalization of $2.71 billion on Thursday, it\u2019s believed the operator would reject such an offer.<\/p>\n

Real Estate Could Be a Factor for Boyd<\/h2>\n

Another reason why Boyd could be reluctant to pursue Penn is that the former owns the bulk of the real estate on which its casinos reside, and it prefers that model when making acquisitions. Conversely, Penn has opted for the operating company (opco) model, and has sold off its gaming real estate.<\/p>\n

We talk or think about kind of OpCo\/PropCo, we still prefer from an M&A standpoint to buy wholeco assets,\u201d said Smith in response to a query from JPMorgan analyst Joseph Greff. \u201cThat is more difficult today because most assets are part of an OpCo\/PropCo structure. And so, we’re certainly willing to do that. We did it with the Pinnacle assets that we bought several years back.\u201d<\/p><\/blockquote>\n

Any prospective buyer of Penn would have to consider the operator\u2019s long-term lease agreements<\/a> with Gaming and Leisure Properties (NASDAQ: GLPI), which owns most of the land on which the operator\u2019s casinos are situated.<\/p>\n","protected":false},"excerpt":{"rendered":"

Boyd Gaming (NYSE: BYD) executives said they\u2019re open to acquisitions, but they didn\u2019t specifically mention Penn Entertainment (NASDAQ: PENN) on their company\u2019s second-quarter earnings conference call on Thursday evening. There was no direct mention of Penn on the call. Speculation that Penn is a takeover target has intensified since late May when investor the Donerail […]<\/p>\n","protected":false},"author":46,"featured_media":80517,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,32093,1],"tags":[81903,81966,81967],"acf":[],"yoast_head":"\nBoyd Gaming Open to M&A, Execs Evasive on Penn Rumor<\/title>\n<meta name=\"description\" content=\"Boyd Gaming Open to M&A, Execs Evasive on Penn Rumor.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/boyd-gaming-open-to-ma-execs-evasive-on-penn-rumor\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Boyd Gaming Open to M&A, Execs Evasive on Penn Rumor\" \/>\n<meta property=\"og:description\" content=\"Boyd Gaming Open to M&A, Execs Evasive on Penn Rumor.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/boyd-gaming-open-to-ma-execs-evasive-on-penn-rumor\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2024-07-26T03:20:15+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-07-26T14:57:05+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2018\/06\/collage-7.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"732\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/boyd-gaming-open-to-ma-execs-evasive-on-penn-rumor\/\",\"url\":\"https:\/\/www.casino.org\/news\/boyd-gaming-open-to-ma-execs-evasive-on-penn-rumor\/\",\"name\":\"Boyd Gaming Open to M&A, Execs Evasive on Penn Rumor\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/boyd-gaming-open-to-ma-execs-evasive-on-penn-rumor\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/boyd-gaming-open-to-ma-execs-evasive-on-penn-rumor\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2018\/06\/collage-7.jpg\",\"datePublished\":\"2024-07-26T03:20:15+00:00\",\"dateModified\":\"2024-07-26T14:57:05+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Boyd Gaming Open to M&A, Execs Evasive on Penn Rumor.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/boyd-gaming-open-to-ma-execs-evasive-on-penn-rumor\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/boyd-gaming-open-to-ma-execs-evasive-on-penn-rumor\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/boyd-gaming-open-to-ma-execs-evasive-on-penn-rumor\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2018\/06\/collage-7.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2018\/06\/collage-7.jpg\",\"width\":1200,\"height\":732,\"caption\":\"Keith Smith, President and CEO of Boyd Gaming. 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