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.
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.
“The deal looks modestly accretive for VICI, but gives it exposure to the desirable locals market, with some growth pipeline,” Jonas said. “We 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.”
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.
Using today’s 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.
“While we don’t see either company selling properties in the near term, we do think operators will continue to explore alternative solutions,” Jonas said. “We 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.”
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’s stock.
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.
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.
The Golden OpCo will retain the Nevada Taverns, Gold Town Casino, which is leased from a third party, and Colorado Belle, which is currently closed, Jonas said. All of the OpCo EBITDA will factor in a parent guarantee to VICI.
Golden noted that an independent committee, which was formed to evaluate the transaction, has unanimously approved the deal. A go-shop period exists through Dec. 5 to solicit alternative bids.
“We’ve also been talking about M&A sale optionality for Golden for some time and wonder if there were limited alternative bids (at least that solved for tax leakage efficiently with a desirable equity component),” Jonas said. “There’s also a go-shop provision until 12/5, so we’ll see if another bidder emerges.”
Texas Capital Securities has illustrated a Golden sum-of-the-parts value closer to $40 and Golden’s own investor presentation cited land and operational value exceeding $30 per share.
“However, Golden hasn’t traded above $30 a share since July 15,” Bain said in his note. “The stock premium and overall valuation make the purchase price justifiable, in our view. We believe Boyd, Red Rock, and fewer than a handful of other candidates may have interest in Golden at a higher value. However, we have no direct knowledge of such and do not believe a Buy rating or higher price target is justified at this time.”
VICI will assume and retire Golden’s $426 million debt using cash on hand, net proceeds, forward-sale agreements, and/or drawing on its revolver. VICI doesn’t expect to require additional financing or any other public market activity to complete the transaction, Jonas said.
“We see the deal from VICI perspective as immediately accretive though slightly less than 1% depending on cash/debt funding mix,” Jonas said. “Importantly, VICI now has exposure to the strong Las Vegas locals market (with gaming revenue up 2% year to date) supported by strong population/market trends. Golden OpCo will become VICI’s fifth largest tenant on an annual rent basis and 15th tenant overall.”
