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MGM Growth Properties, majority controlled by MGM Resorts, agreed on Wednesday to sell itself to VICI Properties Inc in a $17.2 billion deal that will see the casino operator cash in on its valuable real estate to fund growth.
Shares of MGM Growth surged about 10% in premarket trading, MGM Resorts rose about 5%, while VICI dipped about 1%.
The stock-for-stock deal, which includes $5.7 billion of debt, will get MGM Resorts $4.4 billion for its stake in MGM Growth and is a part of MGM’s ‘asset light’ strategy to invest in areas such as sports betting and casino development in Japan.
|VICI||VICI PROPERTIES INC||30.18||-0.08||-0.26%|
|MGP||MGM GROWTH PROPERTIES||39.66||+2.54||+6.84%|
U.S. ANTITRUST ENFORCER SAYS MERGER WAVE MEANS SLOWER VETTING
Last month, MGM Resorts said it would buy the remaining 50% stake in its joint venture CityCenter complex, so that it could sell two properties within the complex to private equity firm Blackstone for $3.89 billion.
"(We) remain focused on pursuing growth opportunities in our core business, with significant financial flexibility to continue to deploy capital to maximize shareholder value," MGM Resorts Chief Executive Officer Bill Hornbuckle said.
MGM Growth owns a portfolio of properties that consists of 12 resorts in Las Vegas and elsewhere in the United States.