PENN NATIONAL GAMING NOW ABLE TO USE FUNDS FOR NEW VENTURES

Implications: Will the ending of this private take over of Penn National improve their stock. Peter Carlino, head man at Penn national thinks they will buy back some of their stock, invest in new properties and generally put Penn back in the plus side of the of the of the profit sheet. Could happen!

Analysis: When this take over bid by Fortress Investment Group and Centerbridge Partners was announced, it seemed like a good deal for both sides. PNG stock was floating in the neighborhood of $60.00 a share. It was fluctuating a bit, however, not by much. When the private buyout was agreed upon it did not seem much of a reach when they settled on $67.00 a share for the purchase. It was a win/win proposition for Penn National and especially Mr Carlino's, family trust. They would have still remained in an equity position and in controls of operating the company. It certainly seemed like a good marriage for both the buyer and the seller. It was my thought, that the only prospect for default in the proceeding would be if FIG and CP may have not been able to get the funds needed to complete the transaction. They also had to maintain enough capital to run the company for a period of time needed to see profits get on better level.

There is no doubt that as Penn Nationals stock dropped from that high $50's mark, the economy sank into a recession, fuel prices out of control, added unemployment and housing in the dumps - there were second thoughts. It's not hard to figure that the buyers had some other ideas as it was getting closer to signing final papers. The stock was dangling in the mid to low $30's and the offer of $67.00 per share must have seemed like a far cry from when the offer was originally made. It also was more costly to borrow money and it seems that they felt that the first loss is the best - it was time to make other arrangements.

Penn National will receive $225 million in breakup fee's - A $1.25 billion dollar interest free loan from the buyers. Not a bad haul for PNG. It remains to be seen, if the buyers are completely out of the picture. I am sure that they have an option to come back at a later date and make another offer. It may not carry the same weight as the original, but who knows?....... I hope that there are good things in store for Penn National. They are the third largest gaming company and hopefully will continue to prosper.