On Monday, 1st of July VICI Properties, Inc. announced that it has successfully acquired three of Harrah’s casino properties in a mega-casino industry deal.
Following this announcement, as per reports, Jeffery Donnelly of Wells Fargo went on to raise the price target from $23 to $24.50 while simultaneously also upgrading VICI from Market Perform to Outperform.
As per reports, given that VICI has a 6 percent earnings accretion, the acquisition of the real estate assets of Harrah’s Atlantic City, Harrah’s New Orleans, and Harrah’s Laughlin along with the changes to the casinos’ leases led to a positive trend for the company.
As part of Eldorado’s $3 billion mergers with Caesars ( world’s largest gaming company), VICI, which was spun off from Caesars Entertainment Corp. a couple of years back in 2017, has completed the purchase of the real estate assets of the three casino properties from Eldorado Resorts, Inc.
Additionally reports also suggest that under the $3.2 billion deal, VICI is set to extend all leases of property to Caesars by 15 years. It will also acquire several new right-of-first-refusal assets and put-call options that include Harrah’s properties in Maryland, Indiana, and on the Las Vegas strip.
In a statement, Donnelly said that a 7.9% cap rate has been implied due to the deal has an implied 7.9% cap rate, Donnelly said.