MGM Growth Properties LLC (the company or MGP) announced that it sent a letter to the chief executive officer and the chairman of the board of directors of VICI Properties Inc. (VICI) proposing to acquire 100% of VICI's outstanding common stock for $19.50 per share, and to date, VICI has elected not to engage in meaningful discussions. MGP reportedly believes that a proposed combination is extremely attractive strategically and financially for both VICI and MGP. MGP is making its proposal public in an effort to engage and move forward quickly to consummate a transaction.
Under the terms of the proposal, the consideration would be in the form of MGP shares, with the exchange ratio fixed at signing of a definitive agreement. If desired by VICI shareholders, MGP would be willing to offer a portion of the consideration in the form of cash. Upon completion of the proposed transaction, VICI shareholders would own approximately 43 percent of the combined company assuming an all-stock transaction and based on MGP's current share price. MGM Growth Properties has substantial financial resources to complete the transaction and its offer is not contingent on any financing condition. Any transaction would be subject to regulatory and shareholder approvals and other customary closing conditions.
MGM Growth Properties believes that a combination with VICI would be accretive to AFFO and represents a compelling opportunity to create significant value for both companies' respective shareholders. The combination of the company and VICI would create the largest triple-net lease REIT and a Top 15 public REIT in the RMZ by enterprise value. The combined company will have a leading portfolio of premier large scale destination leisure, entertainment and hospitality assets with even greater geographic, asset and tenant diversity. The combination would also establish a larger combined company with greater efficiencies and an enhanced financial profile that in our view will provide a better path toward maximizing the value of future growth opportunities.
In addition, the ownership in the combined company would enable VICI shareholders to participate meaningfully in the benefits of the transaction, including synergies, a potential trading multiple expansion, more efficient cost of capital and additional liquidity in a significantly larger company. Furthermore, MGM Growth Properties strongly believes that its proposal provides VICI shareholders with clear value without the execution risk associated with VICI's proposed public offering, particularly given the fees, discounts, dilution, lock-ups, risks and uncertainties associated with such an offering.
The company has posted a presentation for investors on the Events & Presentations section of its website, which can be accessed at www.mgmgrowthproperties.com/events-and-presentations.