Penn Entertainment, Inc. · NASDAQ:PENN
Penn Entertainment — Penn National Gaming — Shareholder Meeting (October 2008)
9 slides from Penn Entertainment's shareholder meeting presentation, Oct 21, 2008
Slide 1: 2008 Annual Meeting of Shareholders: Agenda Item 2
2008 ANNUAL MEETING OF SHAREHOLDERS November 12, 2008 Agenda Item 2 – To Authorize The Company To Utilize A “Private Placement” Instead Of A “Public Offering” If The Company Elects To Issue Shares Of Common Stock To Redeem Its Series B Redeemable Preferred Stock
Slide 2: Safe Harbor
2 Safe Harbor In addition to historical facts or statements of current conditions, this presentation contains forward-looking statements that involve risk and uncertainties within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the company
Slide 3: Seasoned, Proven Management Team
4 Seasoned, Proven Management Team • Penn has a deep management team with extensive gaming experience – Company employs a lean, decentralized management style • Recognized as Best Managed Gaming Company in 2006 by Forbes – Fortune’s 100 fastest growing companies for 6 years(1) 2001 #58 2002 #12 2003
Slide 4: Termination of Proposed Merger
6 Termination of Proposed Merger • On June 15, 2007, the Company announced a proposed merger by and among the Company, certain affiliates of Fortress Investment Group LLC and certain affiliates of Centerbridge Partners, L.P. • On July 3, 2008, the Company entered into an agreement with certain affil
Slide 5: Summary of the Financial Terms: Redeemable Preferred Stock
7 SUMMARY OF THE FINANCIAL TERMS OF THE SERIES B REDEEMABLE PREFERRED STOCK $1.475B TOTAL PROCEEDS • $225M Cash Termination Fee – Taxable as income after related expenses • $1.25B Zero Coupon 7 Year Series B Redeemable Preferred Stock – $67 ceiling price, $45 floor price (potential issuance of 18.7M
Slide 6: Without Shareholder Approval, A Portion Will Be Treated as Mezzanine or Temporary Equity
8 WITHOUT SHAREHOLDER APPROVAL, A PORTION OF THE SERIES B WILL BE TREATED AS MEZZANINE OR TEMPORARY EQUITY, WHICH MAY IMPACT THE FUTURE COST OR AVAILABILITY OF CAPITAL • Current accounting rules require securities with redemption features that are not “solely within the control of the issuer” to be
Slide 7: Without Shareholder Approval, A Portion Will Be Treated as Mezzanine or Temporary Equity (NASDAQ Rules)
9 WITHOUT SHAREHOLDER APPROVAL, A PORTION OF THE SERIES B WILL BE TREATED AS MEZZANINE OR TEMPORARY EQUITY, WHICH MAY IMPACT THE FUTURE COST OR AVAILABILITY OF CAPITAL • NASDAQ Rules – If Series B were redeemed entirely in common stock, the shares to be privately issued, depending on the stock price
Slide 8: Approval of Proposal Will Permit All to Be Treated as Permanent Equity
10 APPROVAL OF PROPOSAL 2 WILL PERMIT ALL OF THE SERIES B TO BE TREATED AS PERMANENT EQUITY, THE SAME ACCOUNTING TREATMENT AS OUR COMMON STOCK • Approval by the common shareholders of Proposal 2, which permits the issuance of shares in excess of the level constituting a “change in control” to the Se
Slide 9: Additional Considerations
11 ADDITIONAL CONSIDERATIONS • The Company is required to redeem the preferred equity on June 30, 2015, regardless of whether the shareholders grant the approval being sought in Proposal 2. • In the event that the Company elects to utilize common stock to redeem the preferred equity, the dilutive im
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