The real estate arm of MGM Resorts, MGM Growth Properties (MGP), has sent a letter to the CEO and the Chairman of the Board of Directors of VICI Properties Inc proposing to acquire 100% of VICI’s outstanding common stock for US$19.50 per share.
In a press release, MGP said that the proposal – which would result in a combined real estate investment trust (REIT) valued at around US$22 billion – was “extremely attractive strategically and financially for both VICI and MGP.” However, it added that VICI had yet to engage in meaningful discussions regarding any such combination.
VICI’s REIT covers a number of properties run by Caesars Entertainment.
The letter, sent by MGM Chairman and CEO Jim Murren on 5 January, was addressed to VICI Chairman James Abrahamson and CEO Edward Pitoniak and stated that, “The combination of VICI and MGP would create one of the largest triple net lease REITs, with an unmatched portfolio of high quality leisure, entertainment and hospitality assets.”
“A combination would also create a larger and better capitalized company with greater scale and an enhanced financial profile to support additional opportunities to create value for our respective shareholders,” Murren added. “We are confident that your shareholders will enthusiastically embrace the attractive financial benefits and compelling strategic logic of the combination.”
Upon completion of the proposed transaction, VICI shareholders would own approximately 43% of the combined company “assuming an all-stock transaction and based on MGP’s current share price.”
MGP said it has substantial financial resources to complete the transaction and its offer is not contingent on any financing condition. It added that the combination of the company and VICI would create the largest triple-net lease REIT and a Top 15 public REIT in the RMZ by enterprise value. The combined company would have a leading portfolio of premier large scale destination leisure, entertainment and hospitality assets with even greater geographic, asset and tenant diversity. The combination would also establish a larger combined company with greater efficiencies and an enhanced financial profile that in our view will provide a better path toward maximizing the value of future growth opportunities.
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