LAS VEGAS, Aug. 4, 2021 /PRNewswire/ -- MGM Resorts
International ("MGM Resorts" or the "Company") (NYSE: MGM) today
announced that it has entered into a definitive agreement with VICI
Properties Inc. ("VICI") (NYSE: VICI) and MGM Growth Properties LLC
("MGP") (NYSE: MGP) whereby VICI would redeem a majority of MGP
operating partnership units held by MGM Resorts for $43 per unit, or approximately $4.4 billion in cash, and acquire 100% of the
outstanding class A shares of MGP in a stock-for-stock
transaction.
"In 2016 we started on our journey to become asset light and
this announcement, together with our recently announced Springfield
and CityCenter transactions, reflects the culmination of those
efforts and a major step forward in simplifying our corporate
structure," said Bill Hornbuckle,
Chief Executive Officer and President of MGM Resorts. "As a result
of these actions, we are well positioned and remain focused on
pursuing growth opportunities in our core business, with
significant financial flexibility to continue to deploy capital to
maximize shareholder value."
This transaction values MGP at $17.2
billion, inclusive of VICI's assumption of approximately
$5.7 billion of pro rata debt.
Adjusted for the recently announced MGM Springfield transaction,
the implied 17.5x pro rata EBITDA multiple ranks among the
strongest for a gaming real estate transaction to date and is a
testament to the quality of the Company's real estate assets and
the Company's strength as a tenant.
Since the Company formed MGP in a milestone transaction in 2016,
the Company and MGP have successfully executed multiple
transactions providing for significant cash proceeds that Company
has used to strengthen its balance sheet, return capital to
shareholders and fund substantial investments in significant growth
opportunities. Among these investments is the formation of
BetMGM, which has now solidified its position as a leader in the
iGaming and sports betting market in the U.S. These efforts also
favorably positioned the Company to weather the unprecedented
crisis created by the COVID-19 pandemic and allowed the Company to
emerge in a position of strength as the economy continues to
rebound. After giving effect to the $4.4
billion in cash proceeds from this transaction, as well as
the Springfield and CityCenter transactions, the Company expects to
have $11.6 billion of domestic
operations liquidity available to enable execution of its goals of
becoming the premier gaming entertainment company, returning value
to shareholders and solidifying its balance sheet.
"The partnership with MGP over the past 5 years has provided
significant value to MGM Resorts as well as MGP's other
shareholders," said Paul Salem,
Chairman of the Board of MGP. "We are thankful to the MGP
management team for all of their efforts to develop MGP into a
premier gaming REIT, which is evidenced by the 15.9% premium
offered by VICI in this transaction, representing a 149% increase
to MGP's valuation since IPO. We look forward to our new long-term
partnership with the great team at VICI."
"Since our IPO in 2016, MGP completed over $7 billion of real estate transactions that grew
our portfolio of premier entertainment assets, including
introducing innovative transaction structures to the gaming REIT
universe," said James Stewart, Chief
Executive Officer of MGP. "As a result of our completed and
announced transactions, MGP's pro rata rental revenue has nearly
doubled from $550 million at IPO to
approximately $1.0 billion, our
annualized dividends per share increased 44%, and our total
shareholder return has more than doubled. Following the strategic
merger with VICI, MGP shareholders will benefit from the collective
strengths of both companies."
Ed Pitoniak, Chief Executive
Officer of VICI Properties, said "We have always admired the
exceptional quality of MGP's real estate portfolio and are thrilled
this transaction allows MGM to reach its stated objectives while
enhancing value for both VICI and MGP shareholders."
As part of the transaction, the existing master lease will be
amended and restated and will provide for an initial term of 25
years, with three ten-year renewals, and an initial annual rent of
$860 million, inclusive of the
pending MGM Springfield transaction. This lease will be guaranteed
by the Company and will provide the Company with significant
flexibility to manage its operations across the portfolio of
properties covered by the lease.
As part of the agreement, MGM Resorts will own an approximate 1%
stake in the VICI operating partnership, worth approximately
$370 million. The transaction is
expected to close in the first half of 2022, subject to customary
closing conditions, regulatory approvals and approval by VICI
stockholders.
J.P. Morgan is acting as exclusive financial advisor
and Weil, Gotshal & Manges LLP is serving as legal advisor to
the Company.
About MGM Resorts International
MGM Resorts
International (NYSE: MGM) is an S&P 500® global entertainment
company with national and international locations featuring
best-in-class hotels and casinos, state-of-the-art meetings and
conference spaces, incredible live and theatrical entertainment
experiences, and an extensive array of restaurant, nightlife and
retail offerings. MGM Resorts creates immersive, iconic experiences
through its suite of Las
Vegas-inspired brands. The MGM Resorts portfolio encompasses
31 unique hotel and gaming destinations globally, including some of
the most recognizable resort brands in the industry. The Company's
50/50 venture, BetMGM, LLC, offers U.S. sports betting and online
gaming through market-leading brands, including BetMGM and
partypoker. The Company is currently pursuing targeted expansion in
Asia through the integrated resort
opportunity in Japan. Through its
"Focused on What Matters: Embracing Humanity and Protecting the
Planet" philosophy, MGM Resorts commits to creating a more
sustainable future, while striving to make a bigger difference in
the lives of its employees, guests, and in the communities where it
operates. The global employees of MGM Resorts are proud of their
company for being recognized as one of FORTUNE® Magazine's World's
Most Admired Companies®. For more information, please visit us at
www.mgmresorts.com. Please also connect with us @MGMResortsIntl on
Twitter as well as Facebook and Instagram.
Forward-Looking Statements
Statements in this release
that are not historical facts are forward-looking statements,
within the meaning of the Private Securities Litigation Reform Act
of 1995 and involve risks and/or uncertainties, including those
described in the Company's public filings with the Securities and
Exchange Commission. The Company has based forward-looking
statements on management's current expectations and assumptions and
not on historical facts. Examples of these statements include, but
are not limited to, the Company's expectations regarding the
anticipated closing of the transaction and any benefits expected to
be received from the transaction, the Company's projected liquidity
position and the Company's ability to execute on its strategic
goals, including returning value to shareholders. These
forward-looking statements involve a number of risks and
uncertainties. Among the important factors that could cause actual
results to differ materially from those indicated in such
forward-looking statements include the continued impact of the
COVID-19 pandemic on the Company's business, the effects of
economic conditions and market conditions in the markets in which
the Company operates and competition with other destination travel
locations throughout the United
States and the world, the design, timing and costs of
expansion projects, risks relating to international operations,
permits, licenses, financings, approvals and other contingencies in
connection with growth in new or existing jurisdictions and
additional risks and uncertainties described in the Company's Form
10-K, Form 10-Q and Form 8-K reports (including all amendments to
those reports). In providing forward-looking statements, the
Company is not undertaking any duty or obligation to update these
statements publicly as a result of new information, future events
or otherwise, except as required by law. If the Company updates one
or more forward-looking statements, no inference should be drawn
that it will make additional updates with respect to those other
forward-looking statements.
CONTACTS:
News Media
BRIAN AHERN
Director of Corporate Media
Relations
media@mgmresorts.com
Investment Community
CATHERINE PARK
Executive Director of Investor
Relations
cpark@mgmresorts.com
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SOURCE MGM Resorts International; MGM Growth Properties