MGM Resorts International said the previously announced transactions with VICI Properties and MGM Growth Properties (MGP) have closed.
The parties noted VICI redeemed a majority of the MGP operating partnership units held by MGM Resorts for $43 per unit, or approximately $4.4bn in cash, and acquired 100% of the outstanding class A shares of MGP in a stock-for-stock transaction.
As part of the deal, the existing master lease was amended and restated and provides for an initial term of 25 years, with three 10-year renewals, and an initial annual rent of $860m. The lease is guaranteed by MGM Resorts and provides the company with what officials termed “significant flexibility” to manage operations across the portfolio of properties covered by the lease.
Following the transactions, MGM Resorts owns an approximately 1% stake in the VICI operating partnership.
The transaction was announced on August 4, 2021.
JP Morgan served as the financial advisor and Weil, Gotshal & Manges LLP served as legal counsel to MGM Resorts.
“Our partnership with MGP over the last six years has provided significant value to our shareholders and I would like to thank the MGP team and its leadership for their efforts throughout this process,” Bill Hornbuckle, Chief Executive Officer and President of MGM Resorts, said in a statement. “This transaction has provided us with significant financial flexibility that will allow us to continue to invest in and grow our business to further maximize shareholder value. We look forward to a productive relationship with VICI.”
The MGM Resorts portfolio encompasses 32 hotel and gaming destinations globally, including many recognizable resort brands. The company’s 50/50 venture, BetMGM, offers US sports betting and online gaming through brands including BetMGM and partypoker.
