Penn Entertainment puts acquisitions behind deleveraging and projects
Deals & M&A1 min read
Penn Entertainment chief executive Jay Snowden said the company is not prioritising acquisitions, with debt reduction, possible share repurchases and recently completed and planned growth projects ahead of deal-making. He said any acquisition would need to offer a high implied free-cash-flow return, limited risk and strategic value; Snowden also said Penn could consider returning to Las Vegas in the future.
Acquisitions are not a leading priority for Penn Entertainment, according to the company, and CEO Jay Snowden pointed to several options that rank higher. Snowden spoke on the conference call with analysts held after the regional casino operator reported third-quarter results.
Snowden listed deleveraging, more stock repurchase activity and four recently completed growth projects among Penn's capital allocation priorities. Ranking ahead of acquisitions as well are the Hollywood Casino Hotel Council Bluffs in Iowa (2028) and Boomtown New Orleans (2029). Snowden called deleveraging the top priority and said Penn could look closely at share repurchases next year.
The executive signaled openness to revisiting the Las Vegas market down the road. He said the company would not take that step for any other party unless a lot of value opportunity existed. He concluded, "it’ll happen at some point, I believe." Bally's completed its purchase of the operating rights to the now shuttered Tropicana in September 2022, the point at which Penn exited Las Vegas. Speculation is widespread that the merged company could sell a Las Vegas casino hotel once Fertitta Entertainment Inc. (FEI) completes its $17.6 billion purchase of Caesars Entertainment.