The stock of Gaming and Leisure Properties Inc (NASDAQ:GLPI) closed 12.50% in green on Monday amid news that it has offered to acquire the real estate assets of Pinnacle Entertainment, Inc (NYSE:PNK). Gaming and Leisure Properties went hostile with its offer to acquire the properties after Pinnacle refused to engage in negotiations. The owner and buyer of real estate leased to casino operators offered a price of $4.1 billion. Investors were excited about the news, as the stock of Pinnacle surged by 15.28%.
And investors have reasons to be excited. Earlier Pinnacle Entertainment, Inc (NYSE:PNK) said that it was going to spin-off its real estate assets into an independent publicly-traded Real Estate Investment Trust. If the deal between Gaming and Leisure Properties Inc (NASDAQ:GLPI) passes, it will remove the risks associated with holding shares of the REIT and will speed up the process of rewarding investors. Earlier today, we have mentioned that one of the biggest winners from the deal would be Parag Vora’s HG Vora Capital Management, an investor with a strong focus on real estate, which owns 5.50 million shares of Pinnacle Entertainment, Inc (NYSE:PNK).
Moreover, if Gaming and Leisure Properties Inc (NASDAQ:GLPI) succeeds with its bid, the acquisition would create the third-largest triple-net REIT by enterprise value. One of the investors that has bet on Gaming and Leisure Properties is Ahmet Okumus of Okumus Fund Management. According to its latest 13F filing, Okumus owns some 3.21 million shares of Gaming and Leisure Properties as of the end of 2014. The position that has a value of $94.29 million is the second-largest in the fund’s equity portfolio and the number of shares was raised by 26% during the fourth quarter of 2014.
Mr. Okumus initiated a stake in Gaming and Leisure Properties Inc (NASDAQ:GLPI) during the third quarter of 2014, and raised the position as the stock lost 6% during October-December period. The company, however, reported a significant top and bottom-line growth for 2014 with revenue surging to $636 million from $242 million a year earlier and diluted EPS jumping to $1.58 from $0.17. Among over 700 funds that we track, the largest shareholder of Gaming and Leisure Properties Inc (NASDAQ:GLPI) is Michael Novogratz’s Fortress Investment Group, which owns 10.50 million shares as of the end of 2014.
Okumus Fund Management has an equity portfolio valued at nearly $480 million as of the end of December, with over a half concentrated in technology stocks. In fact, the equity portfolio of the fund is relatively concentrated as the first position, represented by Web.com Group Inc (NASDAQ:WWWW), amasses over 30% of the total value, while all three top holdings amass 66%.
Web.com Group Inc (NASDAQ:WWWW) represented the largest position in Okumus’ equity portfolio since the third quarter of 2014, when the fund initiated a stake with 7.17 million shares, valued at $143.05 million. During the next quarter, the investor inched up its stake by 9% to 7.78 million shares worth $147.79 million, held as of the end of 2014. Okumus changed the nature of its position to activist at the end of 2014, saying that it plans to engage in discussions with the board and management. At the beginning of February the fund disclosed entering into a deal with Web.com Group Inc (NASDAQ:WWWW), under the terms of which the investor nominated two new independent directors that were appointed to the board.
Gaming Leisure and Properties, which represents the second-largest stake, is followed by AVG Technologies NV (NYSE:AVG), in which Okumus reported ownership of 2.92 million shares, down by 22% on the quarter; the value of the stake amounts to $57.63 million. The stock of AVG Technologies, which represents a long-term investment of Mr. Okumus, gained 13% during the last 52 weeks. A couple of days ago, the company announced that it has reached 200 million subscribers, including 100 million mobile users. Moreover, at the end of February, Nomura Securities increased the price target on AVG Technologies’ stock to $25.00 from $24.00, reiterating ‘Buy’ rating. Nevertheless, other investors own much smaller positions in AVG Technologies NV (NYSE:AVG), such as D.E Shaw’s stake of 586,700 shares, which is the second-largest after Okumus, among funds that we track. In addition, in the equity portfolios of the majority of 19 funds that disclosed holding shares of AVG Technologies NV (NYSE:AVG), the company represents less than 1% of the total value.
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