Paul Singer’s Elliott Management and its affiliates collectively disclosed 5,380,000 shares or a 4.99% stake in Boyd Gaming Corporation (NYSE:BYD), a multi-jurisdictional gaming company based on its latest 13D filing with the Securities and Exchange Commission (SEC).
According to the filing, Elliott, Elliott International and Elliott International Capital Advisors (EICA) have a combined economic exposure and voting power of 7% in Boyd Gaming Corporation (NYSE:BYD).
Undervalued and attractive investment
Elliott indicated that the shares of the gaming company were undervalued and represented an attractive investment opportunity. The activist investor also stated its intention to express its views to and/or meet with the management, the board of directors, and other shareholders, potential acquirers and financing sources from time to time, and to formulate plans or proposals regarding Boyd Gaming Corporation (NYSE:BYD).
The activist investor added that it may take positions or make proposals related to the potential changes in the operations, management, certificate of incorporation and bylaws, board of directors, composition, ownership, capital or corporate structure, dividend policy, strategy and plans of the gaming company to enhance shareholder value.
The stock price of Boyd Gaming Corporation (NYSE:BYD) gained more than 18% to as much as $14.15 per share following Elliott’s disclosure regarding its stake in the company. Over the past 52-week range, the stock traded from $6.91 to $14.75 per share.
There are speculations in the investment community that Elliott could press the management of Boyd Gaming Corporation (NYSE:BYD) to establish a real estate investment trust structure, according to David Bain, an analyst at Sterne, Agee & Leach Inc. He opined that the Boyd family owns 30%, and may need to sell some of its stake in order for the gaming company to create a REIT.
Boyd Gaming financial performance
Early this month, Boyd Gaming Corporation (NYSE:BYD) posted $681.5 million revenues in the fourth quarter of 2013, an increase of 9.1% from its $624.7 million revenues in the year-ago quarter. Its total adjusted EBITDA climbed 30.4% to $131.5 million from $100.9 million a year earlier. However, the gaming company recorded adjusted losses of $26.4 million or $0.24 per share in the fourth quarter