Penn National Gaming Announces Recalculation of Pricing in Tender Offers for All of Argosy Gaming Company's Senior Subordinated Notes

Business Wire, Sept 14, 2005

WYOMISSING, Pa. -- Penn National Gaming, Inc. (PENN: Nasdaq) ("Penn") announced today the recalculated pricing terms of the previously announced cash tender offers commenced by its wholly owned subsidiary Thoroughbred Acquisition Corp. ("TAC") for any and all of the $200 million aggregate outstanding principal amount of Argosy Gaming Company's ("Argosy") 9% senior subordinated notes due 2011 (CUSIP No. 040228-AJ-7) (the "9% Argosy notes") and any and all of the $350 million aggregate outstanding principal amount of Argosy's 7% senior subordinated notes due 2014 (CUSIP No. 040228-AL-2) (the "7% Argosy notes").

The Total Consideration for each $1,000 principal amount of 9% Argosy notes validly tendered and not withdrawn prior to 5:00 p.m. New York City time, on August 3, 2005 (the "Consent Date") is $1,085.07 and for 7% Argosy notes validly tendered and not withdrawn prior to 5:00 p.m. New York City time, on the Consent Date is $1,109.39, each of which includes a consent payment of $10.00. The Total Consideration for the notes were determined by reference to a fixed spread of 50 basis points over the yield, based on the bid price, on the 2.375% U.S. Treasury Notes due August 31, 2006 for the 9% Argosy notes and the 3.25% U.S. Treasury Notes due January 15, 2009 for the 7% Argosy notes, each of which was calculated at 2:00 p.m., New York City time, on September 14, 2005. The reference yield and the tender offer yield for the 9% Argosy notes are 3.832% and 4.332%, respectively. The reference yield and the tender offer yield for the 7% Argosy notes are 3.895% and 4.395%, respectively.

Holders tendering their notes after the Consent Date, but on or prior to 12:00 midnight, on September 27, 2005 (the "Expiration Date") will receive the tender offer consideration of $1,075.07 per $1,000 principal amount of 9% Argosy notes tendered and $1,099.39 per $1,000 principal amount of 7% Argosy notes tendered, but will not receive the consent payment.

The offers remain open and are each scheduled to expire at 12:00 midnight, New York City time, on September 27, 2005, unless extended or earlier terminated. If the Expiration Date of the offers is extended by more than three business days then the Total Consideration and the Tender Offer Consideration will be recalculated as of the tenth business day prior to such Expiration Date. The tender offers and the consent solicitations are being conducted in connection with Penn's pending acquisition of Argosy. The closing of the acquisition of Argosy remains subject to certain conditions, including the receipt of gaming approvals in Illinois. Penn has been informed that the Illinois Gaming Board ("IGB") will place the proposed Argosy transaction on each upcoming public meeting agenda to ensure that the matter can legally be discussed and decided (pursuant to IGB regulations) by the IGB at the earliest possible opportunity. The IGB staff also confirmed to Penn that being placed on the agenda and then tabled is not prejudicial to Penn, but rather a result of the IGB's workload. Penn continues to expect that if the IGB's approval is secured that it will be able to complete the transaction shortly thereafter.

The obligation to accept for payment and to pay for notes and consents in each tender offer and consent solicitation is subject to customary conditions, including, among other things, the consummation of Penn's acquisition of Argosy, or TAC being satisfied in its sole discretion that such consummation will occur substantially concurrently with the expiration date of the tender offers, and TAC having received the proceeds of the financing on terms satisfactory to Penn, or being satisfied in its sole discretion that such financing and such proceeds will be received substantially concurrently with the expiration date of the tender offers.

Deutsche Bank Securities Inc. is serving as the Dealer Manager and Solicitation Agent, and Mackenzie Partners, Inc. is serving as the Information Agent, in connection with the tender offers and solicitation of consents. Requests for documents should be directed to MacKenzie Partners, Inc., toll-free at (800) 322-2885. Questions regarding the tender offers and consent solicitations should be directed to Deutsche Bank Securities Inc., toll-free at (800) 553-2826.

None of Penn, TAC, Argosy, the Dealer Manager and Solicitation Agent or the Information Agent, nor any of their respective subsidiaries or affiliates, makes any recommendation in connection with the tender offers and the consent solicitations. Holders must make their own decisions as to whether to deliver consents and to tender notes, and, if so, the principal amount of notes to tender.

This announcement is not an offer to purchase, a solicitation of an offer to purchase or a solicitation of consents with respect to any securities. The tender offers and consent solicitations are being made solely by the Offers to Purchase and Consent Solicitation Statements, each dated July 21, 2005.

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