Penn National Gaming Announces Pricing of Upsized Public Offering of Common Stock and 2.75% Convertible Senior Notes Due 2026

Penn National Gaming, Inc. (PENN: Nasdaq) (“Penn National” or the “Company”) today announced that it has priced its underwritten public offering of 16,666,667 shares of its common stock, $0.01 par value per share, at a public offering price of $18.00 per share (the “Common Stock Offering”) and its underwritten public offering of $300 million aggregate principal amount of 2.75% Convertible Senior Notes due 2026 (the "Convertible Notes" and such offering, the "Convertible Notes Offering"). The size of the Common Stock Offering was increased from the previously announced $250 million of common stock of the Company, and the aggregate principal amount of the Convertible Notes Offering was increased from the previously announced $250 million. The gross proceeds to the Company from the Common Stock Offering and the Convertible Notes Offering, before deducting underwriting discounts and other offering expenses, are expected to be approximately $600 million (or approximately $690 million if the underwriters in the offerings fully exercise their options to purchase additional shares of common stock and Convertible Notes as described below).

In addition, the Company has granted the underwriters a 30-day option to purchase up to 2,500,000 of additional shares of its common stock at the public offering price less the underwriting discount in the Common Stock Offering (reflecting an increase from the previously announced option of up to $37.5 million additional shares of common stock) and a 30-day option to purchase up to $45 million aggregate principal amount of additional Convertible Notes, solely to cover over-allotments, in the Convertible Notes Offering (reflecting an increase from the previously announced option of up to $37.5 million aggregate principal amount of additional Convertible Notes).

The Convertible Notes will be convertible by holders if certain conditions are met, and during certain periods, based on an initial conversion rate of 42.7350 shares of common stock per $1,000 principal amount of the Convertible Notes, which is equivalent to a conversion price of approximately $23.40 per share, representing a premium of 30.0% above the offering price per share in the Common Stock Offering. The Company will settle conversions of the Convertible Notes in cash, shares of common stock, or a combination thereof at the Company's election. The Company expects to use the net proceeds from the Common Stock Offering and the Convertible Notes Offering for general corporate purposes that will significantly enhance our liquidity while providing the company with the flexibility to invest in our long term growth initiatives. Subject to the satisfaction of customary conditions, the offerings are expected to close on May 14, 2020. Neither of the closings of the Common Stock Offering or the Convertible Notes Offering is conditioned upon the closing of the other offering.