Casino owner Vici Properties buys MGM Growth Properties for $17.2 billion

Real property funding belief Vici Properties is buying MGM Growth Properties in a $17.2 billion deal that may doubtless make the on line casino owner the biggest landowner on the Las Vegas Strip.

MGM Resorts International, which owns the bulk stake in MGM Growth Properties, will obtain about $4.4 billion in money within the deal. The transaction consists of $5.7 billion in debt.

MGM Resorts has been promoting off its actual property belongings lately, and it spun off MGM Growth Properties in 2016. Its portfolio consists of Mandalay Bay and the MGM Grand Las Vegas.

All collectively, Vici will achieve 15 leisure properties within the deal, considerably increasing its geographic footprint, however preserving its deal with the on line casino business.

MGM Resorts International President and CEO Bill Hornbuckle is interviewed throughout the launch of the 100-megawatt MGM Resorts Mega Solar Array, the hospitality business’s largest immediately sourced renewable electrical energy challenge on the earth on June 28, 2021 in Dry Lake Valley, Nevada.

Gabe Ginsberg | Getty Images

“We’re acquiring what we believe is the best-in-class experiential real estate portfolio in America. These are magnificent assets,” mentioned Vici’s Chief Executive Edward Pitoniak in an interview.

When Vici was created to assist Caesars emerge from chapter, it had just one tenant: Caesars. It’s been a mission to broaden its holdings, just lately asserting a deal to purchase the Venetian, Palazzo and Sands Expo and Convention Center for $4 billion.

With Vici’s larger portfolio, Caesars goes from contributing 100% of Vici’s income to 41%. The deal may even give the corporate an estimated enterprise worth of $45 billion, which is way bigger than any of its tenants.

“The deal … has far reaching implications … both within the gaming REIT space and for MGM, who will now be equipped with even more cash on the balance sheet to put towards ROI endeavors,” mentioned Deutsche Bank analyst Carlo Santerelli in a analysis observe.

MGM Resorts additionally touted the monetary flexibility the deal will present.

“As a result of these actions, we are well positioned and remain focused on pursuing growth opportunities in our core business, with significant financial flexibility to continue to deploy capital to maximize shareholder value,” mentioned Bill Hornbuckle, chief govt and president of MGM Resorts, in a information launch.

MGM Growth Properties shareholders will swap every Class A share for $43 in newly issued Vici inventory, or a premium of 16% from MGM Growth’s closing worth on Tuesday.

On Wednesday, MGM Growth shares rose 6.8% to shut at $39.61. MGM Resorts shares inched up 0.9% to shut at $37.27, whereas Vici shares fell 0.3% to $30.18.

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