VICI Properties Selling Nearly 19M Shares, Could Use Cash for Acquisitions

Posted on: November 3, 2022, 05:21h. 

Last updated on: November 10, 2022, 02:03h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

VICI Properties (NYSE:VICI) announced today it’s selling up to 18.97 million shares of its common equity through forward purchase agreements, meaning the real estate investment trust (REIT) won’t initially receive cash proceeds.

VICI acquisition
Luxor on the Las Vegas Strip. Owner VICI Properties is selling stock, and it could consider more acquisitions. (Image: Vegas Means Business)

The largest gaming REIT said it’s selling 16.5 million shares via forward purchase accords, adding that underwriters have a 30-day window to buy another 2.475 million shares.

The underwriters may offer the shares of common stock from time to time for sale in one or more transactions on the NYSE, in the over-the-counter market, through negotiated transactions or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices,” according to a statement issued by the Caesars Palace owner.

Share sales are dilutive to current investors, and as a result, VICI is lower by 2.16%, at this writing, during Thursday’s after-hours session. Bank of America Securities and Citigroup are serving as underwriters for the transaction.

More VICI Acquisitions

As noted above, VICI isn’t immediately receiving cash from the share sale. Rather, it will get capital from the future settlement of the aforementioned forward purchase pacts. However, the company noted it’s possible some of the proceeds could eventually be used for acquisitions.

“The Company expects to use any cash proceeds that it receives upon the future settlement of the forward sale agreements in connection with or in furtherance of the ongoing business and operations of the Company, including funding the Company’s pipeline for the acquisition, development and improvement of properties,” according to the statement.

VICI is one of the most acquisitive companies in the real estate sector. By way of acquisitions, VICI is the largest landlord on the Las Vegas Strip, owning the property assets of the Venetian and the Venetian Expo and Convention Center, Excalibur, Luxor, Mandalay Bay, MGM Grand, Mirage, New York New York, and Park MGM.

VICI also owns the real estate of a slew of regional casinos and is the largest owner of hotel and conference real estate in the US.

VICI Acquisition Speculation

For now, it’s speculation that VICI will use the capital it ultimately receives from the share sales to fund purchases. But given the company’s history, assuming that’s a possibility is not a stretch.

Interestingly, the REIT announced the share sale just days after Apollo Global Management (NYSE: APO) — VICI’s tenant at the Venetian — said it’s open to acquiring more casino assets.

Should the real estate company pursue more deals, it may consider gaming properties outside of Las Vegas, as well as adding to its portfolio of non-gaming venues.