Everbay Capital objects to Golden Entertainment's $30 per share sale

Everbay Capital LP released a follow-up letter to Golden Entertainment Inc. (NASDAQ: GDEN) board members expressing concerns about recently announced transactions, including the sale of casino real estate to Vici Properties Inc. (NYSE: VICI) and the sale of casino operations to Chairman and CEO Blake L. Sartini.

The New York-based investment firm, which has held Golden Entertainment shares since 2021, stated the $2.75 per share price for the remaining company operations appears inadequate, valuing the casino operations and tavern business at approximately 1.1 times EBITDA.

Everbay argued the transaction timing appears opportunistic, noting it was announced two days after Golden Entertainment's stock price hit a four-year low. The firm suggested the board could have achieved better value by selling real estate separately without bundling it with operations.

The letter outlined multiple objections, including concerns about the one-month go-shop period being too short, termination fees that may discourage other bidders, and the bundling of real estate and operations sales into a single agreement. Everbay questioned whether other potential buyers were contacted before the agreement was signed.

Everbay referenced MGM's recent sale of MGM Northfield Park operations at a 6.6 times EBITDA multiple as a market indicator, suggesting Golden Entertainment's operations could be worth significantly more than the proposed $2.75 per share.

The firm called for several disclosures and changes, including separate shareholder votes on real estate and operations transactions, elimination of termination fees during the go-shop period, and extension of the go-shop period to three months. Everbay also requested clarification on whether the company's 62 acres of excess land are included in the Vici or Sartini transactions.

Golden Entertainment announced the transactions would deliver shareholders approximately $30 per share, representing a 41% premium based on the stock's recent trading price.

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