Penn National Gaming folds on private equity deal

NEW YORK (AFP) — Casino and race track operator Penn National Gaming said Thursday it had scrapped plans for an 8.9-billion-dollar takeover from private equity investors after failing to negotiate a lower sales price.

The parties struck a deal in which Penn National will receive 1.475 billion dollars that includes a 225-million-dollar cash termination fee and the purchase of 1.25 billion dollars of preferred shares.

A year ago, Fortress Investment Group LLC and Centerbridge Partners LP had announced all-cash transaction valued at approximately 8.9 billion dollars, including about 2.8 billion dollars of debt. The deal had also been backed by Wachovia and Deutsche Bank.

The deal was the latest to fall though as a result of a stock market slump and tight credit that makes buyouts more difficult to finance.

"It became apparent to Penn National Gaming and its board ...