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Updated: MGM Growth Properties Makes Play to Acquire VICI Properties


Updated: MGM Growth Properties Makes Play to Acquire VICI Properties

Caesars Palace in Las Vegas

MGM Growth Properties LLC (NYSE: MGP) is making a play to combine two of the largest casino owners in the world.

MGM sent a letter to the CEO and the chairman VICI Properties Inc. (OTCMKTS: VICI) proposing to acquire 100% of VICI’s outstanding common stock for $19.50 per share in an all-stock deal.

MGM said VICI had so far has elected not to engage in meaningful discussions. Maybe for a good reason: its stock has been trading for a little more than $20 a share through most of December and January. Its stock price today was trading in a range from $20.50 to $23/share.

VICI has a market capitalization value of about $6.4 billion.

VICI Properties confirmed the unsolicited, non-binding, written proposal from MGM Growth Properties and in consultation with its financial and legal advisors, determined that pursuing it was not in the best interests of the company and its stockholders.

“VICI’s board unanimously believes that our prospects as a standalone independent company will deliver significantly superior results for our shareholders,” said Edward Pitoniak, CEO of VICI Properties. “With our high quality, diversified real estate portfolio and best-in-class corporate governance, we are best positioned to successfully execute on our identifiable embedded growth from call-option and right of first refusal assets and our active pipeline of incremental accretive acquisitions. Through this we believe we will create greater long-term value than by pursuing MGP’s proposal.”

[Editor’s Note: This story was update Wednesday Jan. 17, 9 AM EST with VICI’s response.]

Born out of the bankruptcy reorganization of Caesars Entertainment Corp., VICI Properties was spun-off late last year as the owner of a diverse portfolio consisting of 20 gaming facilities including Caesars Palace Las Vegas. Its national, geographically diverse portfolio consists of over 36 million square feet and features approximately 14,500 hotel rooms and more than 150 restaurants, bars and nightclubs.

MGM Growth Properties currently owns 11 premier destination resorts in Las Vegas and elsewhere across the United States and one dining and entertainment complex. The properties collectively comprise 27,541 hotel rooms, over 2.65 million convention square footage, over 100 retail outlets, over 200 food and beverage outlets and over 20 entertainment venues.

MGM said it believes that a proposed combination is extremely attractive strategically and financially for itself and VICI. The combination of the two would create the largest triple-net lease REIT and a Top 15 public REIT by enterprise value.

In addition, the ownership in the combined company would benefit from operational synergies, wider potential trading in VICI stock, more efficient cost of capital and additional liquidity as a significantly larger company.

MGM said it is working with third party financial and legal advisors and could make a definitive offer within two weeks assuming VICI comes to the table.

Source: Updated: MGM Growth Properties Makes Play to Acquire VICI Properties

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