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On the day Golden Entertainment announced plans to go private and sell its casino properties to the real estate investment trust VICI as part of a lease-buyback, a Wall Street analyst said the overall gaming marketplace is prime for mergers and acquisitions given low stock prices. Another suggested Golden could have other suitors over the next month.<\/p>\n
Before the market opened Thursday, Golden announced the proposed sale to VICI and the operating company going private in a sale led by CEO Blake Sartini, a deal expected to close in mid-2026. Golden locked in a 41% premium to its stock at $30 per share.<\/p>\n
\u201cThe deal looks modestly accretive for VICI, but gives it exposure to the desirable locals market, with some growth pipeline,\u201d Jonas said. \u201cWe continue to see more opportunities for gaming REITs, as operators look for alternative ways to rightsize valuations. Looking elsewhere across the gaming space, we could see further appetite for M&A as operators look to solve for underappreciated trough valuations.\u201d<\/p>\n
In a note from Texas Capital Securities, analyst David Bain said he believes the transaction should boost sentiment on land-based casino names, particularly with a mix of owned land assets, including Caesars Entertainment, Red Rock Resorts, Boyd Gaming, Wynn Resorts, and others.<\/p>\n
Using today\u2019s 7.5% cap rate, Monarch Casino Resorts could net $1.5 billion for its assets versus its current $1.7 billion market cap, while Boyd Gaming could potentially receive $6.1 billion versus its current $6.3 billion market cap, Jonas said.<\/p>\n
\u201cWhile we don\u2019t see either company selling properties in the near term, we do think operators will continue to explore alternative solutions,\u201d Jonas said. \u201cWe also continue to think that Churchill Downs management would evaluate any offers for parts of its business, excluding the Kentucky Derby, to accelerate growth elsewhere or to de-lever.\u201d<\/p>\n
Golden shareholders will receive 24.3 million shares of newly issued VICI stock as of the closing price on Nov. 5. Management expects the majority of Golden shareholders to be long-term holders of the VICI\u2019s stock.<\/p>\n
Golden shareholders will also receive a $2.75 cash distribution from Blake Sartini at the closing of the transaction. The company will continue to pay its regular cash dividend of $0.25 until transaction close.<\/p>\n
In the deal, VICI will acquire the seven assets for a total of $1.16 billion at a 7.5% cap rate, with initial annual cash rent of $87 million. The initial lease terms are 30 years, with four five-year renewal options and annual escalation equal to 2% starting in lease year three, Jonas said. There will be minimum capital expenditure requirements of 1% of the average of total annual revenues over a two-year rolling period.<\/p>\n