US casino owner Vici Properties is acquiring MGM Growth Properties in a deal valued at $17.2bn (£12.4bn).
As part of the deal, which includes MGM Resorts’ controlling stake in the REIT, Vici will assume $5.7bn of debt.
MGM Resorts will bag $4.4bn in cash for its stake, with Vici paying $43 per share for the operating partnership units that it holds in the REIT.
When the deal closes, which is expected in the first half of 2022, Vici will enter into a master lease agreement with MGM Resorts. This is expected to generate $860m in total annual rent, on a 25-year initial term with three 10-year renewal options.
Under the deal terms, MGM Resorts will retain a 1% stake in the Vici operating partnership, worth around $370m.
MGM Growth’s portfolio consists of 12 resorts in Las Vegas and elsewhere in the US, with around 32,400 hotel rooms, 1.5m sq ft of casino floorspace and 3.6m sq ft of convention space.
Vici owns 28 gaming facilities measuring more than 47m sq ft in total. It has around 17,800 hotel rooms and more than 200 restaurants, bars, nightclubs and sportsbooks.
Ed Pitoniak, chief executive of Vici, said: “Through this transformative strategic acquisition, we are merging MGP’s best-in-class portfolio into VICI’s best-in-class management and governance platform, creating the premier gaming, entertainment and leisure REIT in America.”
James Stewart, chief executive of MGP, said: “After many years of growing both of our portfolios, combining them into one company will generate the best results for the shareholders of both companies.
“The combined company will create a superior platform for delivering exceptional returns to MGP’s existing shareholders, by improving diversification, increasing scale, lowering cost of capital and benefiting from future growth.”
Bill Hornbuckle, chief executive and president of MGM Resorts, said: “This transaction unlocks the significant real estate value of our assets, enhances our financial flexibility and strengthens our ability to execute key growth initiatives.”
To send feedback, e-mail pui-guan.man@eg.co.uk or tweet @PuiGuanM or @EGPropertyNews
