Penn National Gaming’s $2.8 billion acquisition of rival regional casino operator Pinnacle Entertainment last year has forced the company to change out its board chairman.
The company said Friday that Peter Carlino has resigned the position he has held since the casino giant went public in 1994 and will be replaced by board member David Handler. Carlino will have a non-voting roll as chairman emeritus.
Peter Carlino
The move was necessitated by restrictions in Section 8 of the Clayton Antitrust Act, Penn National said in a filing with the Securities and Exchange Commission.
Carlino is also chairman of Gaming and Leisure Properties, the real estate investment trust spun out of Penn in 2013. GLPI owns the real estate of nearly 50 casinos and racetracks, including the former Pinnacle properties. The majority of GLPI’s assets are operated on a lease agreement by Penn National.
According to the SEC filing, last fall’s acquisition of Penn made Carlino ineligible to serve as a director of both companies. Carlino will retain his GLPI chairmanship.
Handler, who has also served on Penn’s board since 1994, is a partner at Centerview Partners, an independent financial advisory and private equity firm. In the SEC filing, Penn said Handler would earn annual compensation of $50,000 as a “retainer fee” and $375,000 in company equity.
Handler had been a board member of GLPI, and the same antitrust rules applied to him. In a separate SEC filing, GLPI announced Friday Handler resigned his board position with the publicly traded REIT.
Penn National said Carlino’s resignation, which was not “a result of any dispute or disagreement with the company,” will reduce its board to seven members.
Carlino took over Penn National Gaming from his father in 1994. Under his leadership, the business grew from a small public company with a single Pennsylvania racetrack to the largest regional casino and racetrack operator in the U.S. He left as CEO in 2013 to form GLPI but served as chairman of both companies.
He was inducted into the American Gaming Association’s Gaming Hall of Fame last year.
Jefferies gaming analyst David Katz told investors Friday the change had been in the works since the Pinnacle deal closed.
“The ultimate outcome from the resignation of Penn’s chairman will likely be optical in nature and neutral for shares, in our opinion,” Katz said in Friday morning research note. “We acknowledge the potential negative perception but expect that the decision-making and execution of the business overall should not change.”
Penn acquired the operations of 12 Pinnacle properties in the transaction last year, one of the larger consolidations. The operations of four other Pinnacle properties were acquired by Boyd Gaming Corp. due to potential antitrust concerns. GLPI had acquired all the ownership of the Pinnacle properties in 2015 and leased the operations back to Pinnacle.
Penn National operates 42 regional gaming properties in 19 jurisdictions.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
