Shares in PENN Entertainment spiked 9% on Thursday amid reports that Las Vegas-headquartered regional casino operator Boyd Gaming Corp. has approached PENN on a potential acquisition attempt.
The reports surfaced several weeks after activist investor Donerail Group issued a letter to shareholders calling for the sale of the company. Irked by what it described as heedless spending on the digital side, the activist group criticized PENN for investing billions of dollars into online gambling. The activist group is losing patience at PENN’s inability to produce meaningful returns from its digital segment. Prior to Thursday's news, PENN shares had jumped about 30% since last month's letter.
As of 6:30 p.m. ET on Thursday, PENN shares traded around $20 a share, up nearly 10% from Thursday's close. With vast assets and operations, PENN is valued at roughly $9 billion, including debt. Boyd, which is valued at approximately $7.8 billion, including debt, is the smaller of the two. The relative size of the companies could provide complications if negotiations materialize.
News of the acquisition attempt was first reported by Reuters on Thursday. When reached by Reuters, PENN declined comment.