MGM Growth Properties, the real estate investment trust
(REIT) that MGM Resorts International spun off in 2016 for its property
holdings, has made an unsolicited offer for Vici Properties, the REIT that was
spun off from Caesars Entertainment when it exited bankruptcy last October.
MGM Growth Properties said Tuesday that it sent a Jan. 5
letter to Vici Properties indicating that it was offering $19.50 a share for
Vici, which is approximately a $6 billion offer. With Vici, MGM Growth
Properties would more than double its properties to 32, increase its hotel room
count by more than 50% to 42,000, and would boost its casino and convention
center space by more than 50% to 5.9 million square feet.
Notably, the company would own a total of nine resorts on the Las Vegas
Strip, adding Caesars Palace and Harrah's Las Vegas. Caesars Entertainment
agreed in November to sell the Harrah's real estate to Vici for $1.14 billion.
Vici stock was up more than 8% to $21.60 a share at 1:15 pm
Eastern time Tuesday.
Under the agreement, Vici, whose shareholders are creditors
from the Caesars Entertainment bankruptcy, would own 43% of the combined
company, which would be the 13th largest U.S. REIT by enterprise value,
according to MGM Growth Properties. MGM Growth Properties is making an
all-stock offer, though it would consider paying a portion of the acquisition
"The combined company will have a leading portfolio of
premier large-scale destination leisure, entertainment and hospitality assets
with even greater geographic, asset and tenant diversity," MGM Growth
Properties said in a statement.
"Vici has elected not to engage in meaningful
discussions," MGM Growth Properties added.
MGM Resorts International completed its spinoff of the MGM
Growth Properties REIT in 2016 in an effort to cut debt.