Executives of the real estate investment trust (REIT) that manages a portfolio of properties operated by U.S.-based casino firm Caesars Entertainment Corp has written to James Murren, chairman of market rival MGM Resorts International, rejecting a takeover plan by the latter firm’s REIT, MGM Growth Properties LLC.
James Abrahamson and Edward Pitoniak, respectively chairman and chief executive of Vici Properties Inc, referred to the idea – contained in a January 5 letter from MGM Growth Properties but only made public on Tuesday – as “unsolicited and non-binding” and stated in a reply letter dated January 8, but publicly released on Wednesday: “Vici’s board of directors, with the assistance of its financial and legal advisors, has determined that it is not in the best interests of Vici and its shareholders to pursue your proposal.”
A press release accompanying the response letter described the board decision as having been reached “unanimously”.
MGM Growth Properties had suggested acquiring 100 percent of Vici Properties’ outstanding common stock for US$19.50 per share.
As stated in Vici’s Wednesday release, the firm has a portfolio of 20 gaming facilities covering more than 36 million square feet (3.34 million sq metres) and features approximately 14,500 hotel rooms and more than 150 restaurants, bars and nightclubs. Its properties are leased to leading casino brands of the Caesars Entertainment group, including Caesars, Horseshoe, Harrah’s and Bally’s. According to the REIT’s website, Vici’s assets include Caesars Palace, Las Vegas (pictured).
“Vici’s board unanimously believes that our prospects as a standalone independent company will deliver significantly superior results for our shareholders,” said Mr Pitoniak in the covering press release.
“High-quality, diversified real estate portfolio and best-in-class corporate governance,” meant Vici Properties was best positioned to pursue growth via “call-option and right of first refusal assets and our active pipeline of incremental accretive acquisitions,” stated Mr Pitoniak.
Vici was formed as part of Caesars Entertainment’s bankruptcy reorganisation, and is privately-owned by some of the group’s former creditors, according to information previously released by the casino operator.
MGM Resorts is a majority owner of publicly-traded MGM Growth Properties. The REIT – created in 2016 – owns several real estate assets located in the United States, including some of the most iconic properties in Las Vegas, such as Mandalay Bay and The Mirage. MGM Resorts is the parent company of Macau-based casino operator MGM China Holdings Ltd.
Feb 16, 2018Due to the Chinese New Year holiday, the GGRAsia team will be off between February 16 and 19. We will be back on February 20. We wish all our readers a prosperous Year of the Dog!
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