Penn Entertainment Shares Surge on $9 Billion Boyd Gaming Takeover Rumor

Penn Entertainment shares surging on the $9 billion Boyd Gaming takeover
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Shares of Penn Entertainment (NASDAQ: PENN) surged late Thursday following a report suggesting that Boyd Gaming (NYSE: BYD) may be preparing a takeover bid valued at more than $9 billion for the regional casino operator. The news, which caused Penn’s shares to be halted and subsequently rally, highlights significant developments in the gaming industry.

Details of the Potential Acquisition

Citing unidentified sources, Reuters reported that Las Vegas-based Boyd Gaming is considering an acquisition offer that values Penn Entertainment at over $9 billion, including debt. Neither company has publicly commented on the report. The rumor emerged just nine days after Boyd appointed Michael Hartmeier to its board of directors, fueling speculation about the company’s strategic intentions.

Hartmeier, the former group head of lodging, gaming, and leisure investment banking for Barclays, worked closely with Penn CFO Felicia Hendrix during her 12.5-year tenure at Barclays. Their previous collaboration at Lehman Brothers adds an intriguing dimension to the potential deal.

Investor Pressure and Market Reaction

The report came three weeks after Penn investor the Donerail Group sent a letter to Penn’s board of directors, urging the company to consider selling itself following costly missteps in the online sports wagering space. If Boyd proceeds with a $9 billion offer, it would value Penn at more than triple its current market capitalization of $2.72 billion.

Complexities of a Boyd/Penn Deal

Should Boyd or another suitor offer $9 billion for Penn, and the deal closes, it would be the largest transaction in the casino industry since Eldorado Resorts acquired Caesars Entertainment for $17.3 billion in 2020.

Boyd’s market cap was $5.1 billion as of late Thursday, and its enterprise value of $7.8 billion suggests it might need to access capital markets, either by issuing debt or equity, to finalize a deal with Penn.

Regulatory hurdles could also arise as Boyd and Penn operate in many of the same states, including Illinois, Kansas, Louisiana, Nevada, and Pennsylvania. Regulators in these jurisdictions might raise concerns about competition or potential asset sales resulting from the acquisition.

Another significant issue is property ownership. Most of Penn’s casinos are on land owned by Gaming and Leisure Properties (NASDAQ: GLPI), which would likely have a say in any potential sale of its largest tenant. Although Boyd has a relationship with GLPI, it traditionally prefers owning the land on which its gaming venues are located.

ESPN Bet Implications

If Boyd and Penn reach an agreement, Walt Disney might also be involved due to Penn’s control of ESPN Bet. Last August, Penn agreed to pay Disney-owned ESPN $1.5 billion in stock over 10 years for the rights to use the network’s name on the ESPN Bet mobile sports wagering app. Additionally, Penn granted ESPN $500 million in equity warrants that vest over the decade.

Boyd’s 5% ownership of FanDuel, the largest sports betting app in the country, could complicate the situation. It’s likely that Boyd’s interest in Penn centers more on land-based casinos than online sports betting. Outside of Nevada, Boyd has been content with its relationship with FanDuel and its passive investment in the company.


The potential $9 billion acquisition of Penn Entertainment by Boyd Gaming has significant implications for the gaming industry. While the deal faces numerous complexities, including regulatory approval and property ownership issues, the market reaction indicates strong investor interest. As discussions continue, the outcome could reshape the competitive landscape of the casino and sports betting sectors.