Century Casinos (NASDAQ: CNTY) announced today it’s merchandising the real landed estate assets of a quadruplet of Canadian gaming venues to VICI Properties (NYSE: VICI) for $164.4 billion based on May 16 exchange rates.
The Colorado-based regional casino operator will engage indorse those venues from the tangible land investment trust. The gaming properties VICI is getting are the Century Casino & Hotel Edmonton, Century Casino St. Albert and Century Mile Racetrack and Casino inwards Edmonton, Alberta and Century Downs Racetrack and Casino inwards Calgary, Alberta.
After fees, taxes and other expenses, Century estimates it will sack proceeds of $114.6 one thousand thousand via the transaction, which is slated to secretive in the endorse half of this year.
Simultaneous with the closure of the transaction, the Century Canadian River Portfolio testament follow added to the existing triple-net professional rental accord between subsidiaries of VICI and subsidiaries and yearly split testament growth by $12.8 million, representing an implied acquisition capitalization rank of 7.8%,” according to a financial statement issued by the cassino operator.
The initial letting terms will follow 15 years with tetrad 5-year renewal options.
Century, VICI Extend Relationship
Century and VICI — the largest gambling casino REIT — experience long-running ties. Last August, the deuce companies partnered to gain the Rocky Gap Casino Resort in Flinstone, Md. from Golden Entertainment (NASDAQ: GDEN) for $260 zillion in cash. Century bought the operating rights piece VICI purchased the existent estate.
Additionally, VICI also provided financing to Century so that the manipulator could renovate a geminate of gaming venues inwards Missouri. VICI also owns the real landed estate of the Century-operated Mountaineer Casino, Racetrack and Resort inward New Cumberland, W. Va.
Century has been somewhat active inward efforts to wrench time value from its Canadian properties. For example, the companionship sold the tangible landed estate of its namesake locale inwards Calgary inwards January 2022 for $6.5 million. Analysts view benefits for both parties in the dealing announced today.
“Overall, we survey this deal and subsequent chapiter injectant as incrementally positive for CNTY as we make not believe the company was getting proper whole-co value for its Canadian River properties with the stock currently trading sub 5x our 2024E EBITDAR projection,” wrote Macquarie analyst Chadic Beynon inward a remark to clients. “For VICI, the dealings highlights the company’s want and ability to seek and execute on international deals, with this transaction representing its tertiary international investment.”
Century Uses for Proceeds
While $114.6 meg represents a substantial percent of Century’s securities industry capitalization of $205.67 meg and the keep company has an acquisitive history, it appears to have got other plans for the proceeds it’s gaining from the Canadian River real estate sale.
Namely, the manipulator intends to employ a portion of that majuscule to trim debt and maybe takings hard currency to investors via gillyflower buybacks and/or a special dividend. Some of the proceeds may live directed to enhancing the Nugget Sparks — Century’s only when casino-hotel inwards Nevada.
Macquarie’s Beynon rates the stock up “outperform” with a $12 cost target, implying important upside from the May 16 fill up at $6.64.