LAS VEGAS—VICI Properties said Monday it had launched an initial public offering of up to 50 million shares priced between $19 and $21 apiece for an IPO of more than $1 billion at the upper end of pricing on shares. The gaming resort company, which was spun off from Caesars Entertainment Operating Co. this past October, last week rejected an unsolicited merger bid from MGM Growth Properties (MGP) that would have created the nation's largest net lease REIT by enterprise value.
Gross proceeds from the IPO could be even higher if the offering's underwriters exercise their option to buy up to 7.5 million additional shares. VICI plans to use proceeds to pay down debt and for general corporate purposes.
VICI filed a registration statement for the IPO last month with a placeholder figure of $100 million. At that time, Seeking Alpha cited a report from Research and Markets predicting a compounded annual growth rate of 10.16% between 2017 and 2021 for the global casino market. Increased contribution to taxes and GDP were seen as the main factors driving market growth.
In rejecting MGP's offer, VICI CEO Ed Pitoniak said last week that the company's board believed that “our prospects as a standalone independent company will deliver significantly superior results for our shareholders. With our high quality, diversified real estate portfolio and best-in-class corporate governance, we are best positioned to successfully execute on our identifiable embedded growth from call-option and right of first refusal assets and our active pipeline of incremental accretive acquisitions.”
Morgan Stanley, Goldman Sachs and BofA Merrill Lynch are acting as joint book-running managers and as representatives of the underwriters for the proposed iPO. Barclays, Citigroup and Deutsche Bank Securities are serving as bookrunners. Credit Suisse, UBS Investment Bank, Stifel, Citizens Capital Markets, Wells Fargo Securities, Nomura and Union Gaming are acting as co-managers.
VICI's portfolio contains 20 gaming resorts nationwide, including the recently acquired Harrah's Las Vegas and the iconic Caesars Palace Las Vegas, along with a subsidiary that owns four championship golf courses. The properties are triple net-leased to CEOC, thus providing VICI with a predictable revenue stream backed by a corporate guarantee.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
