Penn Entertainment moved to No Rating at BofA after report of Boyd approach

BofA moves to No Rating on PENN as Penn Entertainment (PENN) shares after Reuters reported that Boyd Gaming (BYD) has approached Penn to express interest in an acquisition, arguing that the shares are no longer trade on fundamentals. The firm believes such a potential merger could be accretive to Boyd, but thinks it possible that the size and combination of financing and leverage required could be “unattractive,” geographic overlaps could result in divestitures, regulatory uncertainty and a lengthy closing, and that strategic synergies could be limited. The firm adds that it sees limited interest in ESPN Bet, which would require “further M&A or a solution down the road.”