Gaming and Leisure Properties Inc. (GLPI) has completed the acquisition of the Tropicana Las Vegas Casino Hotel Resort (Tropicana).
GLPI acquires Tropicana from Penn National Gaming in exchange for rent credits of $307.5 million, which will be applied to rent due under the parties’ existing leases for the months of May, June, July, August, October and a portion of November 2020.
According to the terms of the transaction with Penn National, GLPI will conduct a sale process with respect to the Tropicana Las Vegas (including the casino and hotel business). If a definitive agreement for the sale is entered into during the first year of the sale process, Penn National Gaming will receive 75% of the net proceeds above $307.5 million plus certain taxes, expenses and costs. If a definitive agreement is entered into during the second year of the sale process Penn National Gaming will receive 50% of the proceeds above $307.5 million plus certain taxes, expenses and costs, in each case, subject to the terms and conditions in the Tropicana Purchase Agreement. GLPI will receive all proceeds from any sale occurring after the initial two years.
Simultaneous with GLPI’s acquisition of the Tropicana, the Company entered into a lease with Penn National for the Tropicana for nominal annual rent and Penn National will continue to operate the property for two years (subject to three one-year extensions at GLPI’s option) or until the Tropicana is sold, whichever is earlier. The lease is a triple net lease relieving the Company from carrying and other costs at the property during the lease term.
