Analysis

A float – of sorts – for Fertitta’s Golden Nugget

Tilman Fertitta has engineered another SPAC deal to take his Fertitta Entertainment company public, but will retain a large degree of control in this latest venture.

As part of his latest float Tilman Fertitta will control 60% of the public company via anther SPAC and will retain the posts of chairman, president and CEO.

Included in the acquisition are the Golden Nugget, a near 50% stake in the already-floated Golden Nugget Online Gaming and the Landry’s restaurant chain.

The new company will have an enterprise value of over $6bn.

Fertitta has clearly been enthused by the recent SPAC mania.

“After I compared the opportunities provided by a transaction with FAST, versus the traditional IPO route, it became abundantly clear that we could access the capital markets with more certainty and speed if we did a deal with FAST,” he said in the press release.

FAST, the vehicle set up by Doug Jacob and Sandy Beall, has clearly lived up to its name.

Lining them up

The rate of gaming-related SPACs doesn’t look to be slowing down. After DraftKings at the turn of last year, we have seen the aforementioned Golden Nugget Online and RSI take the SPAC route.

Most recently Accies – a SPAC led by ex-MGM CEO Jim Murren – float via a merger with gaming entity Playstudios.

There are now five Golden Nugget casinos in Nevada, Mississippi and Louisiana as well as Atlantic City and Fertitta clearly aims to add to that number.

“In today’s opportunistic world, I determined that in order to maximize the opportunities in the gaming, entertainment and hospitality sectors, it was preferable to take my company public.”

Specifically, Fertitta believes there will be post-pandemic opportunities. “FAST’s capital along with the equity investment from institutional shareholders will strengthen our balance sheet and allow us to pursue our acquisition strategy,” he said.

“At the end of the day, the decision to do a deal with FAST was a no-brainer.”

Tracks of my tiers

In terms of the Wedge Index of gaming friendliness, Golden Nugget is a second-tier brand. 

As such, whatever markets it might look to enter it will bring three extra points to the tally.

Active in New Jersey for five years now, the online arm has achieved profitability despite fierce competition in that state.

Meanwhile, the company said it had boosted EBITDA at the Golden Nugget property in Atlantic City from $208m in 2021 to $741m in 2019.

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Scott Longley

Scott Longley has been a journalist since the early noughties covering personal finance, sport and the gambling industry. He has worked for a number of publications including Investor's Week, Bloomberg Money, Football First, EGR and GamblingCompliance.com. He now writes for online and print titles across a wide range of sectors.

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