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Penn National to Buy Score Media, Sports-Gambling Firm, for $2B

Penn National agreed to pay $2 billion of cash and stock for sports-betting provider Score Media & Gaming.
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Penn National Gaming  (PENN) - Get Penn National Gaming, Inc. Report shares fell Thursday after the casino titan said it agreed to buy Score Media & Gaming  (SCR) , the Toronto sports-betting company, for $2 billion of cash and stock.

Score Media’s platform and technology are “a powerful complement to the reach of Barstool Sports and its popular personalities and content," Penn National President and Chief Executive Jay Snowden said in a statement.

At last check Penn National shares traded at $63.50, down 4.1%, while Score Media shares traded on Nasdaq were at $29.64 up 63%.

Shares of acquirers in merger deals often decline on the news amid concern about the cost. Shares of the targets generally rise as acquirers pay premiums in the deals.

Under the terms, Penn National will pay $17 cash and 0.2398 share for each Score Media share. That's a total $34 a share based on Penn National’s five-day volume weighted average price as of July 30.

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Both boards have approved the terms. The deal is expected to close in the first quarter of 2022, subject to conditions including regulatory clearances and a vote of Score Media holders.

At closing, Penn National holders would get 93% and Score Media holders 7% of the combined company

Penn National expects to fund the $1 billion cash portion of its purchase with funds on hand.

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Penn National on Thursday also reported second-quarter earnings. The Wyomissing, Pa., company swung to a profit of $198.7 million, or $1.17 a share, in the latest quarter, from a loss of $214.4 million, or $1.69, in the year-earlier quarter.

Revenue soared five-fold to $1.55 billion from $305.5 million a year earlier, when many of its casinos were closed due to COVID-19.