Litt, Activist Investor That Pushed for Gaming REIT Merger, Drops GLP Stake

Posted on: May 16, 2020, 02:44h. 

Last updated on: May 17, 2020, 10:20h.

Activist investor Jonathan Litt’s Land & Buildings Investment Management (L&B) has sold its stake in Gaming and Leisure Properties, Inc. (NASDAQ:GLPI). That likely marks an end to his push that called for the real estate firm to potentially merge with rival Vici Properties (NYSE:VICI).

Litt Drops GLP Stake
Jonathan Litt’s Land & Buildings Investment Management dropped its GLP stake, ending hopes of a merger with a rival. (Image: Wall Street Journal)

Last December, L&B revealed that it took a position in GLP, with Litt noting the investment was, at that time, the largest for his firm. He was quick to openly float the idea of GLP combining with Vici, noting such a combination could lead to 20 percent to 25 percent for shares of the former.

In January, the investor said he had a “productive” meeting with GLP management, adding “substantial upside can be unlocked through improvements as a going concern or through strategic options.”

A 13F filing with the Securities and Exchange Commission (SEC) released Friday indicates L&B liquidated the entirety of its GLP stake sometime in the first quarter. But the document doesn’t include details on exactly when the stock was sold or what GLP’s profit or loss on the transaction was.

Likely Took an “L”

When Litt announced the GLP investment last December, the stock was trading in the low-$40s, though it’s not immediately clear what L&B’s cost basis was on the position.

Shares of the gaming real estate investment trust (REIT) would top $50 in February before the coronavirus pandemic sent shares of casino equities and their landlords tumbling. Amid that carnage, GLP posted a peak-to-trough decline of almost 75 percent.

GLP stock subsequently more than doubled off its March lows, but remains 46.35 percent below its 52-week high.

The company’s primary tenants are Penn National Gaming (NASDAQ:PENN) and Eldorado Resorts (NASDAQ:ERI), the latter of which was another equity position vacated by L&B sometime during the first three months of this year.

The SEC’s form 13F must be filed by investment managers that control $100 million or more in assets. The filings are due 45 days from the end of the prior quarter and typically do not detail when the filer bought or sold securities.

Retaining Gaming Exposure

While L&B ditched its GLP and Eldorado holdings, the firm still has some gaming exposure. Among the 15 equity positions mentioned in the most recent 13F filing, Litt’s company shows positions in MGM Resorts International (NYSE:MGM) and MGM Growth Properties (NYSE:MGP).

The combined value of those stakes is about $16.5 million. L&B took a stake in the Bellagio operator in 2015 and was instrumental in the effort to spin off MGP, which the parent company did in 2016.

Litt was the architect of the “Restore MGM Resorts” campaign, which pushed the gaming company to unlock value for investors by selling its prime real estate assets. Following the MGP spin off in 2016, Litt said further value could be created by bringing all of the gaming company’s properties under the control of the REIT.

It took a few years, but he nearly got his wish. With the exception of the Bellagio, MGP owns the property of nearly all of MGM’s domestic venues.