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Analyst Praises Penn National Gaming Buy

By Associated Press April 1, 2008 Comments (0)

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An analyst said Tuesday the structure of Penn National Gaming Inc.'s pending buyout seems to give investors a good buying opportunity.

Penn is in the midst of a proposed acquisition by Fortress Investment Group LLC and Centerbridge Partners LP for $67 per share.

In a client note, Lehman Brothers analyst Felicia Hendrix said a lot has changed since Penn accepted the buyout offer in June 2007, with eroding credit markets, increased competition and slowing gaming revenue in some markets now weighing on the Wyomissing, Pa.-based racetrack and casino operator.

However, the analyst said Penn's buyout "is one of the most target-friendly leveraged buyout contracts we have seen in the past two years while the debt commitment letter is also target friendly."

Hendrix said Penn's situation might be resolved near term, as its acquisition is set to close on June 15, which could give investors an "actionable opportunity."

Shares of Penn National Gaming added 15 cents to $43.88 in morning trading.

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