Indigenous-owned Pure Casino Entertainment LP is offering to buy publicly traded Gamehost Inc. GH-T for $282-million and will partly finance the purchase by selling Gamehost’s four Alberta properties for $200-million to a U.S. real estate company that focuses on owning casinos.
On Monday, Edmonton-based Pure announced a $13.65 a share takeover bid for Toronto Stock Exchange-listed Gamehost, owner of two Alberta casinos and a pair of adjacent hotels.
Pure also announced an agreement to sell the properties to VICI Properties Inc. VICI-N, a New York-based real estate company with a US$47-billion portfolio that includes landmark Las Vegas casinos.
The friendly offer represented a 16-per-cent premium to Gamehost’s closing price on Friday. Gamehost chief executive officer Darcy Will, the board, executives and other shareholders who collectively own 41.3 per cent of the company have agreed to support the transaction.
Red Deer, Alberta-based Gamehost owns the Deerfoot Inn & Casino in Calgary and the Great Northern Casino in Grande Prairie, along with two hotels near the Great Northern property.
Mr. Will has run Gamehost for over two decades. In a press release, he said: “I am excited to pass on this legacy to Pure, a proven leader in the Alberta gaming industry.”
Pure already owns four Alberta casinos, two in Edmonton, one in Calgary, and one in Lethbridge. In 2023, the company sold the properties to VICI for $272-million, which marked VICI’s first Canadian investment.
VICI owns more than 50 casinos, including a trio of iconic gambling destinations on the Las Vegas Strip: Caesars Palace, the MGM Grand and the Venetian Resort.
Five Nova Scotia-based First Nations own Pure: the Glooscap First Nation, Millbrook First Nation, Annapolis Valley First Nation, We’koqma’q L’nue’kati, and Paqtnkek Mi’kmaw Nation. Pure runs the portfolio with Sonco Gaming Inc., a Halifax-based casino management company.
Like most casino operators, Pure runs the tables, slot machines and restaurants in its facilities while leasing the properties from an outside owner.
VICI’s support for the Pure takeover is part of a strategy to expand its Canadian portfolio due in part to strength of the domestic gaming industry, chief executive officer Edward Pitoniak said in an interview.
“The Canadian gaming industry has strong growth prospects compared to the U.S. market, with greater participation and social acceptance across the country,” said Mr. Pitoniak. “We’re proud to be a part of that growth with partners like Pure.”
In the U.S. market, VICI also owns golf courses and the property under many of family-focused Great Wolf Resorts. Mr. Pitoniak said the company is interested in expanding outside its casino properties in Canada.
Prior to taking the helm at VICI in 2017, Mr. Pitoniak served as CEO of Canadian Hotel Income Properties Real Estate Investment Trust, known as CHIP REIT, and as a senior executive at Intrawest Corp., founded in Vancouver and former owner of some of the country’s top ski resorts.
Gamehost’s financial advisor on the takeover is Bank of Nova Scotia and it hired law firm LINMAC LLP.