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Penn National Gaming is acquiring Argosy Gaming Co. for $1.4 billion cash in an effort to turn itself into the nation's third-largest operator of gambling properties.

Penn National, based in Wyomissing, Pa., said Wednesday it will pay $47 per share for Argosy stock -- a 15 percent premium to Argosy's closing price of $40.75 per share before the deal was announced. Penn National will also assume $805 million of Argosy's long-term debt.

In extended trading, Argosy shares surged $5.16, or 12.7 percent, to $45.91 on the New York Stock Exchange. Penn National shares were also up 12.8 percent in the late session at $46.75 on the Nasdaq Stock Market.

If the deal is approved by regulators and Argosy stockholders, Penn National would have more than $2 billion in annual revenues, more than 20,000 slot machines and about 700,000 square feet of casino space at 13 properties.

Only casino giants MGM-Mirage Inc. and Harrah's Entertainment Inc. would be larger.

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