MGM Growth Properties, a real-estate investment trust (REIT) that will be controlled by MGM Resorts International (NYSE: MGM), filed documents with the U.S. Securities and Exchange Commission (SEC) Friday morning to sell 50 million class A shares of common stock to raise $1.2 billion in an initial public offering (IPO). The IPO price range is $18 to $21 per share, and the company has granted the underwriters an overallotment option on an additional 7.5 million shares.
The REIT will have a dual-class share structure, where class B shares shall have no economic rights in the company. All class B shares will be owned by MGM Resorts and the company “will be entitled to an amount of votes representing a majority of the total voting power of our shares.” Class A shares will have one vote per share.
MGM Growth Properties will acquire nine destination resorts and one dining and entertainment complex from MGM Resorts, all in the United States.
Joint bookrunners for the offering are Bank of America Merrill Lynch, JPMorgan, Morgan Stanley, Evercore ISI, Barclays, Citigroup and Deutsche Bank Securities. Co-managers include BNP Paribas, Fifth Third Securities, SMBC Nikko, SunTrust Robinson Humphrey, Credit Agricole CIB, Union Gaming, Scotiabank and Oppenheimer.
MGM Growth Properties estimates that it will receive $911 million ($1.1 billion if the underwriters exercise their full options), of which the company said it will use $868.1 million for debt and $64 million to pay fees and costs related to the offering. Any remaining receipts will be used for general corporate purposes. Proceeds from the exercise of overallotment options will be used for general corporate purposes.
The new company has applied for listing on the New York Stock Exchange and will trade under the ticker symbol MGP. No date has been set for the IPO.
Shares of MGM Resorts traded up about 2% Friday morning, at $22.09 in a 52-week range of $16.18 to $24.41.
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