Marcio Silva
Land & Buildings Investment Management posted a presentation on Wednesday detailing why it believes the company is significantly undervalued and how Six Flags Entertainment (NYSE:SIX) could unlock substantial value by executing a strategy to monetize real estate while also driving an operational turnaround.
Six Flags (SIX) was called an iconic brand with a tremendous value creation opportunity that is currently trading at a deep discount to its historical valuation. L&B said it is optimistic that modifications to the repositioning strategy should lead to an enhanced guest experience, higher attendance and strong EBITDA growth in 2023.
Specifically, Six Flags (SIX) is noted to own and operate 17 parks across North America.
“L&B believes that Six Flags is a prime candidate for an Opco/Propco separation and that its real estate is likely valued at more than the Company’s entire current equity market capitalization of approximately $1.8 billion.”
The activist firm believes a REIT conversion or sale of Six Flags’ real estate could result in 100% upside for the stock. Notably, the transaction could attract several interested parties with VICI Properties (VICI), Gaming and Leisure Properties (GLPI), Realty Income (O), EPR Properties (EPR), Blackstone Mortgage Trust (BXMT), and numerous private equity funds having expressed interest in acquiring real estate related to large-format leisure assets, including theme parks.
Land & Buildings Investment Management confirmed that it has accumulated a 3% stake in the theme park operator.
Shares of SIX shot up 5.75% in premarket trading on Wednesday after L&B confirmed an earlier report on the activist stake.
