Boyd Gaming has approached Penn Entertainment over the possibility of forming a merger between the two companies.

Boyd Gaming Approaches Penn Entertainment With Merger Proposal

Boyd Gaming will look to purchase Penn Entertainment, which has a market value of $9 billion (including debt) and has a reported official market capitalization of $3bn.

If this possible merger is finalized, it would become one of the largest combinations in US gambling history since Eldorado Resorts purchased Caesars Entertainment for $17.3bn in 2020.

Since the news was released about a possible merger, Penn’s shares increased by 8% to $19.89 on Thursday and Boyd’s stock dropped by 3% to %51.9 – which mirrors the intricacies of this deal.

If Boyd want to complete this deal, then it would need to obtain huge financial support and gain approval from officials within the necessary states.

Furthermore, Boyd would have to strengthen its relationship with Walt Disney, due to ESPN’s $1.5bn licensing agreement with Penn for the ESPN Bet sector.

Currently Penn Entertainment has 43 casinos/racetracks across 20 different US states and offer online sports betting and other casino gambling sites.

Penn’s goal of growing in the online gambling industry has take a huge step, as the company purchased Barstool Sports for $550m and then sold to the founder for $1.

In 2021, Penn purchased Canada’s Score Media and Gaming for $2.1bn in 2021 and have been criticised for making purchases – being pushed to make a sale.

Despite these criticisms, Truist Securities have suggested that Penn will not switch from its operational strategy, especially with the football season set to start in the coming weeks.

Truist analysts said (Via Truist): “Despite the activist letter, we don’t think any sort of formal strategic review at Penn is likely in the near-term with a clear ESPN Bet product roadmap; football season on the horizon; and higher/volatile interest rates still impacting overall M&A for now.”