Vici Properties’ shareholders have approved the proposal to issue VICI common stock in preparation for the company’s acquisition of MGM Growth Properties (MGP).
99.9% of shareholders voted in favour of issuing the shares to MGP Class A stockholders as consideration in the merger, during a meeting called specially for the vote.
VICI – which was spun off of Caesars Entertainment and owns many properties operated by Caesars – first announced its intentions to buy MGP – itself spun off of MGM Resorts – in August in a $17.2bn deal.
The deal is expected to be completed in the first half of 2022, subject to closing conditions being met and regularly approval being granted.
MGP Class A shareholders will receive 1.366 shares of newly issued VICI common stock in exchange for each Class A share of MGP.
VICI believe the merger would bring the combined entity’s enterprise value to $45bn, which would make the new business the largest “experiential REIT (Real Estate Investment Trust)” in the US.
When the deal closes, VICI will then enter into a new master lease agreement with MGM for the MGM properties it will own, such as the Mirage and Park MGM.
The new lease agreement will have a total annual rent of $860M – accounting for MGP’s upcoming acquisition of MGM Springfield – and an initial term of 25 years, with three 10-year tenant renewal options.
Rent will increase at a rate of 2.0% per year for the first 10 years and between 2% and 3% thereafter, depending on inflation.