Pinnacle subsidiary purchases majority stake in Texas racetrack
April 26, 2012
A wholly-owned subsidiary of the Pinnacle Entertainment has entered into agreements to execute a series of transactions that would result in the company securing a 75.5 percent equity stake in Retama Partners (RPL), the owner of the racing license for Retama Park Racetrack. Located approximately 20 miles northeast of downtown San Antonio, Texas, Retama Park is a class 1 pari-mutuel horse-racing track directly off of Interstate 35 in Selma, Texas.
Under the terms of the agreements, the company will pay $22.8 million for the stake in RPL, comprising a purchase of debt securities and other interests related to Retama Park for $7.8 million and cash consideration of $15.0 million that will be used primarily to refinance Retama Development Corporation's (RDC)) existing indebtedness and to provide working capital. The initial purchase of debt securities and other interests related to Retama Park are expected to close immediately.
“The Retama Park transactions provide Pinnacle with the opportunity to expand our portfolio of properties, diversify our operating base and provide strategic value for our shareholders,” said Anthony Sanfilippo, president and CEO of Pinnacle Entertainment. “Pinnacle, along with Retama Partners, will improve the financial health of Retama Development Corporation. Upon closing, we will immediately begin work to integrate Retama Park into our portfolio of properties and leverage our operational and marketing expertise to bolster the track's performance. We believe Retama Park provides significant strategic value for our shareholders given the potential approval of gaming entertainment centers at Texas pari-mutuel facilities and by expanding the reach of Pinnacle's operations in the region into two key Texas markets, San Antonio and Austin."
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