Penn National agrees to acquisition

WYOMISSING, Pennsylvania -- (PRESS RELEASE) -- Penn National Gaming, Inc. (Nasdaq: PENN) today announced it has entered into a definitive agreement to be acquired by certain funds managed by affiliates of Fortress Investment Group LLC (NYSE: FIG) and Centerbridge Partners LP in an all-cash transaction valued at approximately $8.9 billion, including the planned repayment of approximately $2.8 billion of Penn National's outstanding debt.

Under the terms of the agreement, Penn National shareholders will receive $67.00 in cash for each outstanding Penn National share. The purchase consideration represents a premium of approximately 31% over Penn National's closing share price on June 14, 2007. Penn National Gaming has approximately 85.5 million shares outstanding.

The Board of Directors of Penn National Gaming has determined that the merger is fair to and in the best interests of Penn National and its shareholders, and recommends that Penn National Gaming shareholders adopt and approve the merger agreement.

Peter M. Carlino, Chief Executive Officer of Penn National commented, "Since the Company's 1994 initial public offering, Penn National Gaming has transformed itself from the owner of a single racetrack into one of the premier gaming companies in America. Throughout our rapid rise as a publicly traded company, we focused on achieving growth through disciplined financial and risk management. Our Board of Directors' action approving this transaction underscores our thirteen year commitment to consistently generate value for our shareholders. Fortress and Centerbridge are both leading private equity firms with proven track records and strong reputations. This is a very attractive valuation for our shareholders, at a time when the financial markets are recognizing the strong investment rationale for gaming companies.

"This transaction will bring Penn National Gaming new owners who share our vision and support our long-term strategy of growth through continued capital investments in our existing properties through a de-centralized local management structure, employee training and advancement, internally initiated expansion and development opportunities and acquisitions. I know the Penn National Gaming corporate and regional management teams and our 15,000 talented employees are looking forward to working with Fortress and Centerbridge to ensure the ongoing competitiveness of our facilities and the substantial growth opportunities made possible by our business model and strategy."

Penn National Gaming's Chairman and Chief Executive Officer, Peter M. Carlino; Sr. Vice President and Chief Financial Officer, William J. Clifford; and, Executive Vice President, Operations, Leonard M. DeAngelo; as well as other members of its corporate management team, its property level management and personnel are expected to remain with the company.

The merger agreement permits Penn National Gaming, with the assistance of its advisors, to solicit superior proposals from other parties for the 45 day period following the date the merger agreement was executed. There can be no assurances that the solicitation of proposals will result in an alternative transaction.

The transaction is expected to be completed in approximately twelve to sixteen months, and is subject to shareholder approval, FTC approval and approvals from state gaming and racing authorities, as well as satisfaction of certain customary conditions.

The merger agreement does not contain a financing condition. In addition, if the merger is not consummated by June 15, 2008, the per share purchase price will be increased by $0.0149 per day.

Wachtell, Lipton, Rosen & Katz is serving as legal advisor and Lazard advised Penn National Gaming and rendered a fairness opinion to the Board of Directors in connection with the proposed transaction. Willkie Farr & Gallagher LLP is serving as legal advisor and Deutsche Bank and Wachovia are serving as advisors and financial sources to Fortress and Centerbridge in connection with the proposed transaction.