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During the company's fourth-quarter earnings report, Penn National Chairman and Chief Executive Officer Peter Carlino said negotiations are nearly complete with M Resort's equity holders regarding a purchase agreement for the 390-room hotel-casino.
"We began sending offers to stay at the M to some of our highest-value players and, while it is still early, the response has been encouraging," Carlino said.
Penn National Chief Operating Officer Tim Wilmott said the company mailed more than 100,000 marketing and promotional pieces on the M Resort.
Wyomissing, Pa.-based Penn National spent $230.5 million in October to acquire $860 million in debt covering M Resort, which included $160 million in subordinated debt formerly held by MGM Resorts International and $700 million in debt from Bank of Scotland.
M Resort opened in March 2009 and was built and operated by Anthony Marnell III and his family.
"We believe we are close to completing negotiations with the property's equity holders regarding ownership and future operations and are simultaneously working with Nevada gaming regulators to secure necessary approvals for the transaction," Carlino said.
Penn National said revenues and cash flow from M Resort could begin showing up on the company's balance sheet in the third quarter.
M Resort is one of seven development projects Penn National Gaming has on the company's books.
Penn National opened a casino in Maryland in September; has expansions under way at a riverboat casino in Illinois and a racetrack casino in West Virginia, that are expected to be completed this year; is building new casinos in Toledo, Ohio and Columbus, Ohio, that have planned openings in 2012; and is building a new casino in Kansas that will open in 2012.
Penn National posted higher-than-expected revenue for the fourth quarter that ended Dec. 31, but also reported a fourth-quarter net loss of $153.1 million, or $1.97 a share. The results included pre-tax impairment charges of $193.2 million.
In the same quarter a year ago, Penn National reported a net loss of $355.4 million, or $4.54 a share.
In the fourth quarter, Penn National revenue grew 13.4 percent to $630.2 million, as business appeared to be returning to some of the company's regional markets.
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