Pinnacle Entertainment To Separate Real Estate Assets From Its Operating Assets

(RTTNews) - Pinnacle Entertainment, Inc.'s (PNK) board has approved a plan to pursue a separation of its operating assets and its real estate assets into two publicly traded companies, subject to the resolution of various contingencies. The board has decided this after reviewing various alternatives designed to enhance long-term shareholder value, including alternate financing, capitalization and strategic paths.

The firm plans to carry out the proposed separation of its real estate assets through the creation of a newly formed, publicly traded, real estate investment trust that would be distributed to PNK stockholders in a tax-free spin-off, with PNK remaining an operating entity, following the transaction.

As part of the plan being pursued by the company, Prop Co would initially own the real estate assets of PNK, with substantially all of the assets being leased back to Op Co for use by its subsidiaries via. a triple net Master Lease Agreement. The terms of that Master Lease Agreement, including key items like rent structure and coverage, have yet to be determined.