Penn Entertainment doubles on Barstool shares acquisition

Penn Entertainment, previously known as Penn National Gaming following a rebrand earlier this month, has announced that it will be acquiring the remainder of Barstool Sports Inc. shares and assume 100% control over the company. The news was reported by numerous outlets, including Bloomberg News, Front Office Sports, and Penn Entertainment itself.

The company has already filed the relevant paperwork with the US Securities and Exchange Commission, confirming that Penn intends to exercise its call rights. Effectively, Penn will consolidate its control of the company and complete the takeover.

Should all go according to plan, and there are no indicators that it shouldn’t, Penn Entertainment will complete the acquisition of the remainder of the shares in February, turning Barstool Sports into a fully owned subsidiary. The two companies entered into an agreement back in February 2020.

At the time, Penn Entertainment (then Penn National Gaming) sought to court Barstool Sports and buy a significant share of its stock. After negotiations, the companies agreed to 36% of the total control of the company. The reported amount of the deal stood at $161.2m. But then, Penn said that it would seek to acquire half of all stock in the company, paying an additional $62m.

The remainder or 50% of the stock should now be purchased for $325m in total. Penn Entertainment and Barstool Sports have already been working together across a number of brick-and-mortar venues, including the Penn National Racecourse, Hollywood Casino York, and Hollywood Casino Morgantown, to name a few. The resulting sportsbook properties have been developed to resonate with younger audiences, as noted in Penn National’s most recent quarterly report. The companies will also soon convert their temporary sportsbook at L’Auberge Baton Rouge into a full-scale one.

The completion and acquisition of the remainder of the stock will be subject to customary regulatory requirements and conditions. There seems to be no reason or immediate danger for the deal to backfire, marking the latest consolidation in the sports gambling industry in the United States.

This is not Penn’s first acquisition rodeo. In October 2021, the company bought Score Media, a Canadian property, perhaps in anticipation of the regulation of sports betting and iGaming in the country. Penn also joined the American Gaming Association’s responsible gambling program, "Have A Game Plan," in January.

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