LAS VEGAS, Jan. 16, 2018 /PRNewswire/ — MGM Growth Properties LLC (NYSE: MGP) (the “Company” or “MGP”) today 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 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% 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.

The full text of MGM Growth Properties’ January 5, 2018 letter to VICI is below.

January 5, 2018

Mr. James R. Abrahamson
Chairman of the Board

Mr. Edward B. Pitoniak
Chief Executive Officer

VICI Properties Inc.
8329 West Sunset Road
Suite 210
Las Vegas, NV 89113

Dear Jim and Ed:

We appreciate the open conversation between Ed and James on December 20, 2017 and earlier this week regarding a potential transaction between VICI Properties Inc. (“VICI”) and MGM Growth Properties LLC (“MGP”). As we had highlighted in the December conversation, we continue to believe that a combination of our two companies has a compelling strategic rationale and represents an extraordinary opportunity to create significant value for our respective shareholders. While we would have hoped to have made further progress over the past two weeks given your potential IPO timing, we continue to stand ready to engage now and move forward quickly with your cooperation.

The combination of VICI and MGP would create one of the largest triple net lease REITs, with an unmatched portfolio of high quality leisure, entertainment and hospitality assets. A combination would also create a larger and better capitalized company with greater scale and an enhanced financial profile to support additional opportunities to create value for our respective shareholders. We are confident that your shareholders will enthusiastically embrace the attractive financial benefits and compelling strategic logic of the combination.

To enable the VICI Board to properly evaluate a potential transaction, we have summarized in this letter the key terms of our proposal:

Purchase Price & Consideration

We are proposing a 100% stock acquisition of all of the outstanding common stock of VICI at a price of $19.50 per share, which would be based on a fixed exchange ratio[1] of MGP shares for each outstanding VICI share at the time of the signing of a definitive transaction. We believe this represents a meaningful premium to the potential value your current shareholders would receive in the event of an IPO, especially after considering the fees, discounts, dilution, risks and uncertainties associated with such an offering. If desired by your 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% of the combined company based on MGP’s current share price. This transaction and future ownership in the combined company will enable your shareholders to participate meaningfully in the benefits of the transaction, including synergies, a potential trading multiple increase, more efficient cost of capital and additional liquidity in a significantly larger company.

Next Steps

We have completed a thorough review of publicly available information relating to VICI and are prepared to complete confirmatory diligence on an accelerated basis. We are working with third party financial and legal advisors and will move expeditiously to negotiate definitive documentation in parallel with our diligence review, which we expect can be completed within two weeks assuming your prompt engagement and cooperation.

MGP has substantial financial resources at our disposal to complete the transaction and our offer is not contingent on accessing any third-party sources of capital.  Additionally, MGP is a preeminent REIT engaged in owning high-quality leisure, entertainment and hospitality assets, licensed in numerous jurisdictions across the country, and we are confident in our ability to receive any required regulatory approvals without undue delay.

This letter does not create any legally binding or enforceable obligations. No such obligation would be imposed unless and until a definitive agreement is executed.

We believe your Board will agree that this combination is compelling for your shareholders and we look forward to working with you to negotiate a mutually agreeable transaction. In that regard, we would appreciate a response from your Board as soon as possible, and no later than Monday, January 8 at 5pm ET. Should you have any questions, please feel free to contact James directly at XXX-XXX-XXXX.

Very truly yours,

James J. Murren
Chairman of the Board
MGM Growth Properties LLC

James C. Stewart
Chief Executive Officer
MGM Growth Properties LLC

About MGM Growth Properties
MGM Growth Properties LLC (NYSE:MGP) is one of the leading publicly traded real estate investment trusts engaged in the acquisition, ownership and leasing of large-scale destination entertainment and leisure resorts, whose diverse amenities include casino gaming, hotel, convention, dining, entertainment and retail offerings. MGP currently owns a portfolio of properties acquired from MGM Resorts, consisting of eleven premier destination resorts in Las Vegas and elsewhere across the United States and one dining and entertainment complex which opened in April 2016. As of December 31, 2016, these properties collectively comprise 27,541 hotel rooms, over 2.65 million convention square footage, over 100 retail outlets, over 200 food and beverage outlets and over 20 entertainment venues. As a growth-oriented public real estate entity, MGP expects its relationship with MGM Resorts and other entertainment providers to attractively position MGP for the acquisition of additional properties across the entertainment, hospitality and leisure industries that MGM Resorts or other entertainment providers may develop in the future. For more information about MGP, visit the Company’s website at http://www.mgmgrowthproperties.com.