FLL Overview

Concerns Over Sale Price: Everbay Capital LP criticizes the sale price of $2.75 per share for RemainCo, arguing it undervalues the company's operations and is a strategic move by CEO Blake Sartini to acquire it at a discount following a drop in stock price.

Call for Transparency: Everbay urges the Board of Directors to provide disclosures regarding the sale process, including whether other potential buyers were contacted and the rationale for bundling the sale of RemainCo with the real estate transaction.

Timing of Transactions: The timing of the transactions, announced shortly after the company's stock hit a four-year low, raises suspicions that they were designed to benefit Sartini at the expense of shareholders, who could have received a higher value by selling the real estate separately.

Request for Shareholder Approval: Everbay demands that the Board allow shareholders to vote separately on the real estate and RemainCo transactions, emphasizing the need for a fair process that does not favor insider bidders.

Sale-Leaseback Proposal: Everbay Capital LP urges Golden Entertainment to pursue a sale-leaseback of its casino real estate, using the proceeds to repay debt and distribute a special dividend to shareholders, potentially amounting to 150% of the current stock price.

Underperformance of Stock: The letter highlights Golden Entertainment's significant underperformance in total shareholder returns compared to market indices and peers, suggesting that the company's real estate value is not reflected in its stock price.

Value Realization for Shareholders: Everbay estimates that after the sale-leaseback, shareholders could realize a total value of at least $42 per share, combining the special dividend and the retained value of the casino operations and tavern business.

Strategic Alternatives Committee: Following the proposed transaction, Everbay recommends that the Board establish a special committee of independent directors to explore strategic alternatives for the remaining company, ensuring that any potential sale is conducted transparently and fairly.