Penn National sale derailed by credit crunch

The $6.1 billion purchase of casino and racetrack operator Penn National Gaming Inc. by two private-equity firms is off, the latest in $65 billion worth of such buyouts to founder on credit-market turmoil since September. The termination, announced yesterday, comes as the gambling industry is under pressure from consumer-spending cutbacks driven by high gasoline prices and a weak job market.

Unlike most jilted targets, however, Penn National, of Wyomissing, Pa., is getting a hefty consolation prize: $1.475 billion in cash from Fortress Investment Group L.L.C., Centerbridge Partners L.P., and their banks, Penn National said yesterday. Penn National shares rose $1.06, or 3.71 percent, to close yesterday at $29.66. "This is not the outcome that we expected. However, as we are here and as we look at the opportunities this settlement affords, we see a pretty bright future for this company," chief executive officer Peter M. Carlino said in a conference ...