Golden Entertainment to Acquire Stratosphere
Golden Entertainment, Inc. announced Monday that it has agreed to purchase American Casino & Entertainment Properties LLC, the company that owns the Stratosphere on the north end of the Las Vegas Strip as well as the Arizona Charlie’s properties. According to the press release, the deal is for $781 million in cash plus approximately 4 million shares of Golden stock. Based on the ten-day weighted average price on June 9th of $17.05 per share, the deal is worth about $849.2 million.
With the deal, Golden enlarges its footprint with locals in Nevada and gives itself higher visibility properties than the ones it already owned. Golden Chairman and CEO Blake L. Sartini talked up the deal in a press release:
This is a transformational event for our Company, creating a significant gaming portfolio centered around Nevada-based casinos that, in addition to our Pahrump properties, will include two well-known Las Vegas locals casinos, a destination resort in Laughlin, and the iconic Stratosphere property on the Las Vegas Strip. Our market leading distributed gaming businesses in Nevada and Montana, as well as our Casino Resort in Maryland, present several opportunities to cross-market and promote these new assets that we welcome to the Golden family. As with our existing businesses, we believe the American properties are poised to benefit tremendously from anticipated continued economic growth in Nevada, particularly from the continued strength in the Las Vegas market.
Aside from the local gaming implications, this deal is notable from a poker perspective because one of the Board members of Golden Entertainment and the former CEO of the company’s previous iteration is Poker Hall of Famer Lyle Berman. From financial statements published this spring, Berman owns 1,657,841 shares of Golden stock, the equivalent of 7.4 percent of the company, based on 22.5 million shares outstanding.
Golden stock soared 18.1 percent on Monday, the day of the acquisition announcement. That $3.07 boost means that Berman became $5 million richer that day.
Berman is legendary in high stakes cash game circles, but no public records are kept of cash games, so let’s take a quick look at his live tournament prowess, as that’s the one thing reliable records ARE kept for. Berman has three World Series of Poker bracelets, though his last one was earned more than two decades ago. According to TheHendonMob.com, Berman has earned around $2.7 in live tournaments.
Back to the acquisition, Mr. Sartini called the American properties “an ideal complement” to Golden’s. Speaking further, he said:
Our proven strategy of focusing on guest service, quality food and beverage offerings and effective player marketing will complement the strong existing operations currently at all of American’s properties. In addition, given the recent investment activity focused on the north end of the Las Vegas Strip, we see future potential to develop the approximately 15 acres of excess real estate surrounding the Stratosphere. This acquisition supports our goals for growth in many ways, including the potential to use our increased free cash flow and financial scale to pursue distributed gaming opportunities in existing or potential new markets.
The deal is expected to close by the end of the year.
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