Penn National's $5.82 billion takeover is off

But they will pay for pulling out. Penn National will get $225 million in cash as a termination fee, plus $1.25 billion in what amounts to no-cost capital until 2015.

The company said its board was unwilling to negotiate a reduced buyout price and that the settlement was preferable to suing the buyers to force the acquisition.

"Look at it as a zero-percent loan for seven years," said Nicholas Danna, senior gaming analyst at Sterne, Agee and Leach. The deal is "the first one of its kind that I've seen."

Still, disappointment was palpable during a conference call Penn National executives held with analysts Thursday.

"This is not the result we expected," said Chief Executive Peter Carlino. "If we had seen a clear and certain path in getting to closing, we would have taken it."

Messages left for representatives of the two potential buyers, Fortress Investment Group LLC and Centerbridge Partners LP, were not immediately returned.

A year ago, Fortress and Centerbridge agreed to pay $67 per share for Wyomissing-based Penn National. On Thursday, shares closed at $29.66, up $1.06, or nearly 3.7 percent, amid heavy volume..

Danna said the stock's fall reflects concerns about consumer spending.

The takeover also was bogged down by the state regulatory approval process. Analysts had doubts about the deal's close, saying banks appeared to be reconsidering funding commitments amid significant write-downs in the financial sector.