Caesars Palace in Las Vegas MGM Growth Characteristic LLC (NYSE: MGP) is making a play to integrate 2 of the biggest gambling establishment owners in the world.
MGM sent a letter to the CEO and the chairman VICI Properties Inc. (OTCMKTS: VICI) proposing to obtain 100% of VICI’s exceptional typical stock for $19.50 per share in an all-stock deal.
MGM said VICI had so far has elected not to participate in significant conversations. Maybe for a great reason: its stock has been trading for a little more than $20 a share through most of December and January. Its stock price today was trading in a variety from $20.50 to $23/share.
VICI has a market capitalization value of about $6.4 billion.
VICI Characteristic confirmed the unsolicited, non-binding, written proposition from MGM Growth Residences and in consultation with its monetary and legal advisors, identified that pursuing it was not in the best interests of the business and its stockholders.
” VICI’s board unanimously thinks that our prospects as a standalone independent company will provide substantially remarkable outcomes for our investors,” stated Edward Pitoniak, CEO of VICI Properties. “With our high quality, varied real estate portfolio and best-in-class corporate governance, we are best positioned to successfully perform on our identifiable ingrained development from call-option and right of first rejection assets and our active pipeline of incremental accretive acquisitions. Through this our company believe we will create higher long-lasting worth than by pursuing MGP’s proposition.”
[Editor’s Note: This story was upgrade Wednesday Jan. 17, 9 AM EST with VICI’s reaction.]
Born out of the insolvency reorganization of Caesars Entertainment Corp., VICI Properties was spun-off late last year as the owner of a varied portfolio including 20 gaming facilities consisting of Caesars Palace Las Vegas. Its national, geographically diverse portfolio consists of over 36 million square feet and features approximately 14,500 hotel rooms and more than 150 dining establishments, bars and bars.
MGM Growth Characteristic currently owns 11 premier location resorts in Las Vegas and in other places across the United States and one dining and home entertainment complex. The residential or commercial properties collectively make up 27,541 hotel spaces, over 2.65 million convention square video, over 100 retail outlets, over 200 food and beverage outlets and over 20 home entertainment locations.
MGM said it thinks that a proposed mix is exceptionally appealing tactically and financially for itself and VICI. The mix of the 2 would produce the biggest triple-net lease REIT and a Top 15 public REIT by business value.
In addition, the ownership in the combined company would benefit from operational synergies, broader possible trading in VICI stock, more effective cost of capital and additional liquidity as a substantially larger company.
MGM said it is dealing with third party financial and legal advisors and might make a definitive deal within two weeks assuming VICI concerns the table.