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(Bloomberg) – Vici Properties Inc. acquires MGM Growth Properties LLC, including MGM Resorts International’s stake in real estate investment trust, in deal that values takeover target at 17.2 billions of dollars.
Under the terms of the deal, Vici will buy out the majority of MGM Growth’s operating partnership units held by MGM Resorts for $ 43 each, or a total of approximately $ 4.4 billion, in cash, and acquire the remains of MGM Growth in a stock-for-share purchase transaction. MGM Growth’s total value includes about $ 5.7 billion in prorated debt, MGM Resorts said in a statement on Wednesday.
MGM Growth shares jumped 7.4% to $ 39.84, while Vici fell 3.3%.
The deal is part of MGM Resorts’ efforts “to become lightweight assets,” CEO Bill Hornbuckle said in the statement. “We are well positioned and remain focused on finding growth opportunities in our core business, with significant financial flexibility to continue deploying capital to maximize shareholder value. “
As part of the deal, MGM Resorts will own approximately 1% of Vici’s operating partnership, worth approximately $ 370 million. The transaction, which requires the approval of Vici’s shareholders, is expected to close in the first half of next year. MGM Resorts formed MGM Growth in 2016, and the two companies have since closed multiple transactions, using the proceeds to return capital to shareholders and fund growth.
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