Penn National Gaming to be sold for $8.9 billion

Penn National Gaming Inc., the owner of several racetrack-casinos and other gambling facilities, has reached an agreement to be sold to two private-equity firms for $8.9 billion, the company announced on Friday.

Fortress Investment Group and Centerbridge Partners will pay $67 per share for Penn National's 85.5 million shares outstanding, a 31 percent premium on the Penn National closing share price on Thursday of $51.14. The sale is subject to shareholder and regulatory approval, and is expected to close within 12 to 16 months.

Early on Friday, Penn National's stock was up more than 22 percent to over $62.

Penn National had its initial public offering in 1994, when the company owned a single racetrack, Penn National Racecourse in Grantville, Pennsylvania. Since then, the company has focused on acquiring slot-machine gambling facilities, and it currently operates more than 21,000 slot machines at 17 locations in 12 states and one Canadian province. In adition to Penn Natuonal, the company's holdings include Charles Town in West Virginia, and Zia Park in New Mexico.

In a statement, Penn National's board recommended that shareholders approve the transaction. Penn National has the right to solicit other offers over the next 45 days, the statement said.

Fortress Investment Group manages $36 billion in assets, and is headquartered in New York. Centerbridge is a $3.2 billion private investment fund and is also based in New York.