Penn National Gaming extends tender for Argosy's 7%, 9% notes

New York, Sept. 13 - Penn National Gaming, Inc. said it has again extended its tender offer for Argosy Gaming Co.'s $200 million 9% senior subordinated notes due 2011 and $350 million 7% senior subordinated notes due 2014.

The expiration is now midnight ET on Sept. 27 instead of midnight ET on Sept. 21. Pricing will be recalculated on Sept. 14. It was previously extended from Aug. 31 and Aug. 26.

So far $199.9 million of the 9% notes and $333.7 million of the 7% notes have been tendered, unchanged from the previous announcement on Aug. 13.

Closing remains dependent on various conditions including approval from the Illinois Gaming Board. If that approval is obtained, Penn National expects to close the acquisition shortly after.

At the last announcement on Sept. 1, Penn National recalculated pricing terms for the tender - although those will now once more be revised.

Under the Sept. 1 announced, the company will pay $1,087.57 per $1,000 principal amount of 9% notes and $1,113.32 per $1,000 principal amount of 7% notes, both including a consent payment of $10.00. The prices are up from the previous $1,086.97 and $1,104.06 respectively.

The consent deadline was at 5 p.m. ET on Aug. 3.

As already reported, for each $1,000 principal amount in notes, Penn National determined its payment based on the notes' redemption price on their first call date plus interest payments up to the call date, discounted using the bid-side yield on a reference Treasury plus 50 basis points. From that total, accrued interest up to but excluding the payment date is subtracted.

For the 9% notes, the call price is $1,045 per $1,000 principal amount and the reference Treasury is the 2.375% note due Aug. 31, 2006.

For the 7% notes, the call price is $1,035 per $1,000 principal amount and the reference Treasury is the 3.25% note due Jan. 15, 2009.

Those who tender their holdings after the consent deadline will not receive the $10.00 per $1,000 principal amount consent payment.

As previously reported, Penn's wholly owned subsidiary Thoroughbred Acquisition Corp. began the offer on July 21 for Penn's pending acquisition of Argosy.

As already announced, Thoroughbred intends to finance the offers with part of the proceeds from Penn National's planned new $2.725 billion of senior secured credit facilities.

Deutsche Bank Securities Inc. (800 553-2826) is dealer manager and solicitation agent and Mackenzie Partners, Inc. (800 322-2885) is information agent.

Wyomissing, Pa.-based Penn National Gaming owns and operates casino and horse racing facilities.

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