• CEO Blake Sartini is buying the Strat operator, valuing it at $30 a share
• Golden is entering into a $1.16 billion sale-leaseback deal with VICI Properties pertaining to its seven Nevada casinos
• News announced on same day an investor pushed for this type of transaction

Shares of Golden Entertainment (NASDAQ: GDEN) soared Thursday after CEO Blake Sartini announced he’s taking the Strat operator private and that the company entered into a $1.16 billion sale-leaseback deal with VICI Properties (NYSE: VICI).

Golden Entertainment’s Strat Las Vegas. The operator’s stock soared on news it’s going private. (Image: YouTube)

Previously scuffling, Golden stock is higher by more than 35% on volume that’s more than 9x the daily average in midday trading on the announcement. Sartini’s go-private offer for the company values it a $30 a share, a 41% premium to where the stock closed on November 5.

Golden stockholders will receive total consideration of a fixed exchange ratio of 0.902 shares of VICI common stock for the sale of seven casino real estate assets and a cash distribution with proceeds from Blake Sartini of $2.75 for each share of Golden stock held at the closing of the transaction,” according to a statement issued by the Las Vegas-based casino operator.

The transaction, which is expected to close in the middle of next year, puts to rest months of speculation regarding Golden’s role, if any, in casino industry consolidation, with much of that chatter pertaining to the Strat’s real estate and nine unused acres of land held by Golden near that off-Strip venue.

With Golden Entertainment, VICI Expands Nevada Holdings

VICI Properties, the largest owner of gaming real estate, is entering into a sale-leaseback agreement with a newly formed entity controlled by Sartini under which the real estate investment trust (REIT) will acquire the property assets of Golden’s seven Nevada casinos.

Golden’s master lease with VICI is for 30 years with an initial annual rent of $87 million at a cap rate of 7.5% with an inflation-linked escalator of 2% per year starting in the third year. Four, five-year tenant renewal options are also included. For VICI, the deal appears to be diversifying its Las Vegas exposure, reducing dependence on Strip properties.

“The transaction also provides VICI with exposure to the Las Vegas Locals market, which was the 2^nd largest gaming market in the U.S. in 2024 by gross gaming revenue,” said the REIT in a statement. “The Locals market has long been targeted by VICI due to its key characteristics of consistent and stable growth, strong demographic and demand tailwinds driven by population trends, and high barriers to entry.”

Interesting Timing for Golden to Go Private

News of Sartini taking the Arizona Charlie’s operator private arrived less than a month after Mario Gabelli’s GAMCO Investors took what some market observers believed to be an activist stake in the gaming company. It’s not clear if Gabelli played any part in the transaction, but he’s been handsomely rewarded by his investment in Golden.

“Golden’s shareholders have suffered trailing 1-year and 3-year total shareholder returns (including dividends) of (27.1%) and (46.3%), respectively, despite generally robust equity markets,” according to the asset manager.  “The Russell 2000 index, for example, has returned 10.8% and 40.4% over the same 1-year and 3-year periods.  Meanwhile, peers of Golden – other land-based gaming operators which own their casino real estate – have averaged trailing 1-year and 3-year returns of 14.5% and 41.1%, respectively.”

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