Red Rock Resorts Paying $3 Special Dividend, Buying up to $350M in Stock

Red John Rock Resorts, Inc. (NASDAQ:RRR) is deploying a substantial shareholder rewards program, announcing Midweek it’s paying a $3 per portion special dividend.

The parent companionship of Station Casinos also said it’s buying upwards $350 jillion worth of its have shares inwards a Dutch auction. In aggregate, this amounts to one of the gaming industry’s largest returns of working capital to investors since the bulge of the coronavirus pandemic, which triggered a spate of dividend cuts and suspensions past cassino operators.

The special dividend is payable to shareholders of record on November 23, 2021, and is expected to follow paid on Dec 22, 2021,” said the company inward a statement.

Special dividends are one-off payments to investors and extend companies flexibility, because those payouts aren’t delivered quarterly, as is the caseful with traditional distributions by house servant companies. There is some precedent for special payouts inward the gaming industry. For example, Wynn Resorts (NASDAQ:WYNN) delivered such distributions before this century when Steve Wynn was noneffervescent at the helm of the operator.

Red Rock Balance Sheet is Strong

Red Rock quietly repurchased $26 million worth of its have gillyflower during the indorse canton and its leveraging declined to 1.8x. That confirmed it has the resources to redeem the aforementioned payout without burdening its equilibrise sheet.

When it reported third-quarter results before this month, the manipulator said its table “authorized an increment in the company’s share repurchase program from $150 zillion to $300 million, which gives the companionship o'er $173 zillion of repurchase capacity.”

Earlier this year, the operator announced the $650 billion cut-rate sale of Palms Casino Resort inward Las Vegas to the San Manuel Band of Mission Indians — a go that generates important proceeds to scale down debt. At the clip that dealing was revealed, analysts speculated Red Rock would use that majuscule to pare liabilities and perhaps restart its dividend.

Red John Rock ruined the Sept billet with $89.9 billion in cash and hard cash equivalents and $2.68 1000000000 in debt.

Inside Red Rock Dutch Auction

Red Rock’s Dutch auction isn’t a traditional deal repurchase program. Under the terms of the tender offer, the gaming society testament buy no more more than $350 trillion of its shares from investors at prices not exceptional $53 and not infra $46.

The stock up closed in(p) around $49 on Tuesday, but tidings of the special dividend and the Dutch auctioneer has it trading higher past more than Captain Hicks percent today at simply o'er $52. Investors are displaying enthusiasm for the announcements, as the loudness inwards Red River Rock stockpile is already at the day-by-day middling to a lesser extent than terzetto hours into the trading day. There’s a chance the society could purchase somewhat to a greater extent equity than is being forecast.

“In the event that Shares are in good order tendered at or to a lower place the purchase price (and non right withdrawn) having an aggregative purchase damage of to a greater extent than $350,000,000, RRR may practice its flop to purchase upward to an additional II percent of its spectacular Shares without extending the expiration date,” according to the statement.