Revised Version
U.S. casino operator Boyd Gaming (BYD.N) has expressed interest in acquiring Penn Entertainment (PENN.O), a peer company with a market value exceeding $9 billion, including debt, according to sources familiar with the situation.
Following Reuters’ report of Boyd’s approach, Penn’s shares rose 8% on Thursday afternoon in New York to $19.89, while Boyd’s stock dropped 3% to $51.90. If successful, this deal would be the largest merger among U.S. gambling companies since Eldorado Resorts’ $17.3 billion acquisition of Caesars Entertainment (CZR.O).
Boyd would also need to win over Walt Disney (DIS.N), which has a partnership with Penn through its sports network ESPN. Sources indicated there is no certainty that Penn will engage in negotiations with Boyd. The sources, who wished to remain anonymous due to the confidential nature of the matter, mentioned that Penn declined to comment, while Boyd and Disney did not immediately respond to requests for comment.
Penn operates 43 casinos and racetracks across 20 U.S. states and offers online sports betting and casino gambling in several locations. Last year, Penn secured a $1.5 billion licensing deal with Disney, allowing the casino operator to use the ESPN brand in its online sportsbook. As part of the agreement, Penn’s rights to the ESPN Bet brand will initially last for 10 years, and ESPN has been granted rights worth about $500 million to purchase Penn stock.
The initial success of the ESPN deal has strengthened the position of Penn CEO Jay Snowden after a previous acquisition did not meet expectations. Penn acquired Barstool Sports for $550 million, only to sell it back to its founder Dave Portnoy for $1 last year. Additionally, in 2021, Penn acquired Canada’s Score Media and Gaming for $2.1 billion.
