[ad_1]
MGM Resorts International President and CEO Bill Hornbuckle is interviewed at the launch of the 100-megawatt MGM Resorts Mega Solar Array, the hospitality industry’s largest direct-source renewable electricity project on the 28th June 2021 in Dry Lake Valley, Nevada.
Gabe Ginsberg | Getty Images
Real estate investment trust Vici Properties is acquiring MGM Growth Properties in a $ 17.2 billion deal that will likely make the casino owner the largest landowner on the Las Vegas Strip.
MGM Resorts International, which owns the majority stake in MGM Growth Properties, will receive approximately $ 4.4 billion in cash as part of the transaction. The transaction includes debt of $ 5.7 billion.
MGM Resorts sold its real estate assets in recent years and separated from MGM Growth Properties in 2016. Its portfolio includes Mandalay Bay and MGM Grand Las Vegas.
In total, Vici will acquire 15 entertainment properties under the deal, significantly expanding its geographic footprint, while focusing on the casino industry.
“We are acquiring what we believe to be the best experiential real estate portfolio in America. These are magnificent assets,” said Edward Pitoniak, Managing Director of Vici, in an interview.
When Vici was created to help Caesars out of bankruptcy, she had only one tenant: Caesars. He’s made it his mission to expand his holdings, recently announcing a deal to buy the Venetian, Palazzo and Sands Expo and Convention Center for $ 4 billion.
Along with Vici’s larger portfolio, Caesars contributes 100% of Vici’s sales to 41%. The deal will also give the company an estimated enterprise value of $ 45 billion, which is far higher than any of its tenants.
“The deal… has far-reaching implications… both in the gaming REIT space and for MGM, which will now be equipped with even more cash on the balance sheet to devote to ROI efforts,” Deutsche Bank analyst Carlo Santerelli said in a research note.
MGM Resorts also touted the financial flexibility the deal will provide.
“Thanks to these actions, we are well positioned and remain focused on finding growth opportunities in our core business, with significant financial flexibility to continue to deploy capital to maximize shareholder value,” said Bill Hornbuckle , Managing Director and President of MGM Resorts. , in a press release.
MGM Growth Properties shareholders will exchange each Class A share for $ 43 in newly issued Vici shares, a 16% premium over MGM Growth’s closing price on Tuesday.
MGM Growth shares rose 6.8% to close at $ 39.61 on Wednesday. MGM Resorts shares rose 0.9% to close at $ 37.27, while Vici shares fell 0.3% to $ 30.18.
[ad_2]
Source link