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NEWS 2 February 2018

VICI real estate investment trust raises greater than expected funds with IPO

By Robert Simmons
VICI, the property company that owns almost twenty-four Caesars Entertainment Corporation properties has raised more money than expected from an initial public offering.

The real estate investment trust which initially aimed to sell 50 million shares at prices between $19-$21 per share actually sold over 60.5 million shares at a price of $20 per share, raising over $1.21bn for the company.

In the wake of this increased demand, the company increased its over-allotment option from an initial 7.5 million shares to over 9.1 million shares, enabling the company to raise an additional $181m as part of the IPO. This IPO is the fourth largest for a real estate investment trust in American financial history.

The newly issued shares traded on the New York Stock Exchange at a $20 a share at close of business on Thursday, giving the company an estimated value of around $8bn. VICI’s IPO will close on 5 February.

In an interview with the Las Vegas Review Journal, VICI Chief Executive Officer Ed Pitoniak said: “There is growing interest in gaming real estate as a real estate asset class worthy of institutional investment.

“It is still a relatively new sector versus so many other well established REIT sectors. We are fortunate to be a point where that interest is growing strongly.”

Primarily real estate investment trusts are businesses which lease space and collect rent on income producing property in the residential and commercial property sectors.

VICI, which was formed as part of the process by which Caesars exited bankruptcy, leases 20 casinos including Caesars Palace and Harrahs back to Caesars to allow them to operate the casinos. Each lease is valid for an initial 15 years, with additional bolt-on leases of five years.

The company posted net income of $439m for the first nine months of 2017, generating over $649m in revenue and adjusted EBITDA of $544.6m during the period.

Scattered reports claim that the rival real estate investment trust company run by MGM Resorts, MGM Growth Properties tendered an offer to buy VICI in the period immediately preceding the IPO, however these have not been confirmed.
RELATED TAGS: Land-Based | Industry | Legal & Regulatory | Financial | Casino
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