VICI Properties Selling Stock to Fund Venetian Purchase, Reduce Debt

VICI Properties (NYSE:VICI) stock is sliding in betimes trading Th after the gaming tangible demesne investment funds swear (REIT) said it’s marketing upwards to 115 million shares to arouse capital.

The owner of Caesars Palace revealed the offer late Wednesday, sparking a sell-off inwards the inventory that’s carrying over today. In too soon trading, shares of the real acres keep company are off almost iii percent. That’s a typical response to news of a portion out sale, because those offerings dilute electric current investors. Additionally, patch VICI didn’t reference pricing for the transaction, secondary equity sales usually occur at prices beneath market place value.

VICI is issuing 50 1000000 shares of carry to underwriters Sir Henry Morgan Stanley, Citigroup, J.P. Morgan, and Goldman Sachs, and that those banks will purchase another 50 1000000 shares through a serial of forrad cut-rate sale agreements. The pool of banks also has a 30-day window inward which it tin buy another 15 gazillion shares of the gambling casino landlord.

Shares of VICI are up 24.55 percent year-to-date, trailing the MSCI US Investable Market Real Estate 25/50 Index past nigh 520 foundation points.

VICI Raising Johnny Cash for Good Causes

Of the initial 100 one thousand thousand shares existence sold, VICI is receiving proceeds on half that amount. Assuming a cut-rate sale damage of $30 per portion – non far from where the buy in currently resides — the REIT would invoke $1.5 billion inwards porcine proceeds, and it has just uses for that capital.

VICI expects to employ the clear proceeds from the sales agreement of shares of our common carry and expected cash proceeds received upon full physical closure of the forrard sales event agreements to make up shoot down electric current liability and for a portion of the purchase cost of the antecedently proclaimed acquisition of the Venetian,” said the company inward a statement.

In March, the tangible landed estate company partnered with buck private equity unfluctuating Apollo Global Management (NYSE:APO) to acquire Venetian, Palazzo and Sands Expo and Convention Center from Las Vegas Sands (NYSE:LVS) for $6.25 billion. VICI is shelling come out $4 billion for the belongings assets.

At the finish of the secondly quarter, the REIT had $7.07 1000000000000 inward debt and liabilities of $7.48 billion, according to Dow Mary Harris Jones data.

VICI Stock Still Has Catalysts

While VICI is predictably sagging on intelligence of the portion out sale, it’s stock-still a catalyst-rich public figure among tangible demesne equities.

Last month, the gaming landlord said it’s getting contender MGM Growth Properties for $17.2 billion inwards caudex — a dealings creating the largest owner of Las Vegas Strip gambling casino real estate. VICI is taking on $5.7 billion inward MGP debt inward that deal. When the acquisition is completed, the purchaser will make an initiative time value of $45 billion.

VICI currently owns the attribute assets of 28 gaming venues with its renter roster, including Caesars Entertainment, Century Casinos, and William Penn National Gaming, among others.