Penn National (PENN) Confirms Agreement To Terminate Merger

July 3, 2008 9:25 AM EDT

Penn National Gaming, Inc. (Nasdaq: PENN) confirmed that it has entered into an agreement with Fortress Investment Group LLC (NYSE: FIG) and Centerbridge Partners, L.P. to terminate the proposed merger agreement whereby Penn National Gaming was to be acquired by PNG Acquisition Company for $67.00 per share.

In connection with the termination of the merger agreement, Penn National Gaming will receive $1.475 billion, which will consist of a $225 million cash termination fee and the purchase of $1.25 billion of Penn National Gaming's redeemable preferred equity due 2015, by affiliates of Fortress, affiliates of Centerbridge, affiliates of Wachovia, and affiliates of Deutsche Bank.

The company said, "it became apparent to Penn National Gaming and its Board of Directors that the proposed merger transaction would not be completed without significant and lengthy litigation which is inherently unpredictable. Further, it also became apparent to the Company and its Board that a re-negotiated, reduced purchase price was not a viable option."

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