Shares of Six Flags Entertainment Corp. (NYSE: SIX) were up by more than 5% in pre-market trading on Wednesday after a Wall Street Journal report stated that activist investor, Land & Buildings Investment Management has urged the entertainment and theme park company to spin off or sell its real estate.
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Land & Buildings Investment Management (L&B) has an approximately 3% stake in SIX. The firm’s founder and CIO, Jonathan Litt believes that the theme park operator’s real estate alone could be far more than its current market capitalization of around $1.7 billion.
According to the report, Litt is of the opinion that real estate and private equity firms could definitely be interested in SIX’s real estate. Litt is also in discussions with Six Flags’ management to split the business into different operating and property companies.
L&B stated in its presentation to investors that it believes that a “separation of the SIX real estate could drive 50% upside to the shares today and over 100% upside is possible in the next 18 months as operational performance improves and EBITDA sees significant growth.”
SIX stock has already lost more than 50% of its value in the past year.