VICI to Acquire MGM Growth Properties for $17.2B

VICI Properties is acquiring MGM Growth Properties for $17.2 billion, including the assumption of $5.7 billion in debt. When the deal is complete, VICI will have an estimated enterprise value of $45 billion, making it one of the largest experiential net lease REITs.

Under the terms of the agreement, MGM Growth Properties shareholders will receive 1.366 shares of newly issued VICI stock in exchange for each Class A share of MGP. The fixed exchange ratio represents an agreed upon price of $43.00 per share of MGP Class A shares based on VICI’s trailing 5-day volume weighted average price of $31.47 as of July 30, 2021 and represents a 15.9% premium to MGP’s closing stock price on August 3, 2021. 

MGM Resorts will receive $43.00 per unit in cash for the redemption of the majority of its MGP Operating Partnership units that it holds for total cash consideration of approximately $4.4 billion and will also retain approximately 12 million units in a newly formed operating partnership of VICI Properties. The MGP Class B share that is held by MGM Resorts will be cancelled.

As part of the deal, VICI Properties will enter into an amended and restated triple-net master lease with MGM Resorts, with an initial total annual rent of $860 million, including MGP’s pending acquisition of MGM Springfield. The lease will have an initial term of 25 years, with three 10-year tenant renewal options. 

Additionally, VICI will retain MGP’s existing 50.1% ownership stake in the joint venture with Blackstone Real Estate Income Trust, which owns the real estate assets of MGM Grand Las Vegas and Mandalay Bay. The BREIT JV lease will remain unchanged and provides for current annual base rent of approximately $298 million.

The transaction was approved by the Board of Directors of each of MGM Resorts, MGP and VICI Properties (and, in the case of MGP, the Conflicts Committee). The parties expect the transaction to close in the first half of 2022, subject to customary closing conditions, regulatory approvals and approval by the stockholders of VICI Properties. The VICI Properties Board of Directors and management team will remain unchanged.