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Casino Owner VICI Properties Completes 4th Largest REIT IPO in History

IPO Completes a $2.4 Billion Raise in 30 Days After VICI Rebuffs Takeover Offer from Rival
February 1, 2018
Ceasars Palace, Las Vegas

VICI Properties Inc., a Las Vegas-based owner of net leased casinos, completed the fourth-largest REIT initial public offering in history yesterday and began trading this morning on the NYSE under the symbol VICI.

VICI priced an upsized offering of 60.5 million shares at $20/share. The REIT has also granted to the underwriters a 30-day overallotment option to purchase up to an additional 9.075 million shares. In total, the REIT is expected to raise gross proceeds of $1.4 billion.

The offering was coincidentally significant for another reason. In becoming the fourth largest REIT IPO in history and the largest hotel REIT, according to NAREIT data, VICI replaced its rival MGM Growth Properties in that spot, which had raised $1.2 billion in its IPO two years ago.

Just two weeks ago, MGM Growth Properties made an unsolicited offer to purchase VICI for $19.50 shares. VICI rejected the bid believing that its prospects as a standalone independent company could deliver significantly superior results, Ed Pitoniak, CEO of VICI said.

VICI's stock has been trading today at around $1 more per share than its IPO price.

The IPI raised some $200 to $300 million more than initially planned.

Pitoniak told CoStar they would be weighing day-to-day how to deploy the extra money raised, including how much dry powder they may want to put on their books.

About $670 million of the proceeds were already earmarked to pay down some outstanding debt.

In addition to the IPO raise, in late December, VICI raised another $1 billion in a private equity offering. The net proceeds from the transaction were used to partially fund VICI's purchase of Harrah’s Las Vegas for $1.14 billion.

Pitoniak said he was gratified by the level of support from investors and the value they placed on the company and its real estate.

Born out of the bankruptcy reorganization of Caesars Entertainment Corp., VICI Properties was spun-off late last year as the owner of a diverse portfolio consisting of 20 gaming facilities including Caesars Palace Las Vegas. Its national, geographically diverse portfolio consists of over 36 million square feet and features approximately 14,500 hotel rooms and more than 150 restaurants, bars and nightclubs.

Morgan Stanley, Goldman Sachs & Co. LLC and BofA Merrill Lynch acted as joint book-running managers and as representatives of the underwriters for the offering. Barclays, Citigroup and Deutsche Bank Securities are serving as bookrunners. Credit Suisse, UBS Investment Bank, Stifel, Citizens Capital Markets, Wells Fargo Securities, Nomura and Union Gaming are acting as co-managers for the offering. The law firm of Kramer Levin represented VICI in the offering and its formation last year.

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