NEW YORK, NY--(Marketwire - Nov 20, 2012) - Gaming stocks received a boost last Friday after Penn National Gaming Inc. announced breakup plans to create the first casino-focused REIT. Analysts have suggested that other gaming companies may follow suit as it would help free up capital. "This could be a trend within the gaming sector to distribute profits on a more tax efficient basis," said Joseph Greff, a JPMorgan Chase & Co. analyst. The Paragon Report examines investing opportunities in the Resorts & Casinos Industry and provides equity research on Penn National Gaming, Inc. (NASDAQ: PENN) and Ameristar Casinos, Inc. (NASDAQ: ASCA).
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Penn National will break up into two public companies and place a majority of their properties, at least 17, into a new real estate investment trust. Shareholders of Penn will a dividend of $5.35 a share in addition to stock in the newly established REIT. The breakup is expected to occur, pending regulatory approval, during the second half of 2013.
"This process will unlock the tremendous value of our real estate portfolio," Chairman and CEO Peter Carlino said on a conference call. "This is just strictly our view of how we can best take the assets we have and make the most of them."
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Penn National Gaming owns, operates or has ownership interests in gaming and racing facilities with a focus on slot machine entertainment. The company presently operates twenty-nine facilities in nineteen jurisdictions. The new REIT would own 17 casino facilities encompassing over 3,200 acres of land, 6.9 million square feet of building space and 20,000 structured parking spaces.
Ameristar Casinos is an innovative casino gaming company featuring the newest and most popular slot machines. The company generates more than $1 billion in net revenues annually. The company currently offers an annual dividend of $0.50 per share for a yield of approximately 2.56%.
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