Golden Entertainment stock rating downgraded to Market Perform by Citizens

Investing.com - Citizens downgraded Golden Entertainment (NASDAQ:GDEN) from Market Outperform to Market Perform following the announcement of an acquisition deal. The stock currently trades at $28.52, approaching the acquisition price, after surging 41.19% in the past week.

Golden Entertainment announced it is being acquired by its CEO and Chairman Blake Sartini for $30 per share, representing a 41% premium to the previous day’s closing price. The company, which offers a 3.51% dividend yield, is currently trading above its InvestingPro Fair Value estimate.

As part of the transaction, VICI Properties will purchase the underlying real estate of seven Golden Entertainment casino assets for $1.16 billion at a 7.5% cap rate, marking the first transaction involving Las Vegas Locals market assets by a real estate investment trust.

Golden Entertainment shareholders will receive 0.902 shares of VICI common stock and a $2.75 cash distribution from Mr. Sartini for each share of GDEN stock they own.

Citizens analyst Jordan Bender indicated that while a competing offer cannot be ruled out, the likelihood is low given the substantial premium and the approximately 25% family voting control.

In other recent news, Golden Entertainment has announced a significant transaction involving the sale of its operating assets. The company has entered into a definitive agreement to sell these assets to Blake Sartini, its founder, chairman, and CEO, while VICI Properties will acquire seven of its casino real estate assets in a sale-leaseback transaction. This deal will see Golden stockholders receive a fixed exchange ratio of 0.902 shares of VICI common stock and a $2.75 cash distribution per Golden share, valuing the transaction at $30.00 per share.

VICI Properties has agreed to purchase seven Nevada casinos from Golden Entertainment for $1.16 billion. The acquisition includes notable properties such as The STRAT Hotel on the North Las Vegas Strip and two Arizona Charlie’s locations. In light of these developments, Texas Capital Securities has downgraded Golden Entertainment from Buy to Hold, lowering its price target to $30.00.

Meanwhile, Citizens JMP and Wells Fargo have both adjusted their price targets for Golden Entertainment to $34.00. Citizens JMP maintains a Market Outperform rating, projecting EBITDAR estimates of $145 million for 2025, $151 million for 2026, and $156 million for 2027. Wells Fargo continues to rate the stock as Overweight following a second-quarter EBITDA of $38 million, which met consensus expectations.

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