MGM Resorts International wants to raise .2 billion from its initial public offering of its new real estate investment trust (REIT), called MGM Growth Properties.
An April regulatory filing indicates the MGM intends to sell 50 million shares in its REIT at a cost of $18 to $21 per share. If those numbers are realized, analysts say MGM would nearly double the $626 million raised from all other initial public offerings in the U.S. so far this year.
If the REIT proves successful for MGM, gaming industry analysts say it could result in similar moves by other large casino operators, but small- and mid-sized casino operators would take large risks by making similar moves.
MGM Growth Properties started marketing its offering to potential investors this month, and MGM plans to use money raised to pay down its about $4 billion in debt from its many recent developments and acquisitions.
The REIT is backed by 10 of MGM Resorts’ properties, including six located along the Las Vegas Strip, and will be sold on the New York Stock Exchange under the MGP symbol.
The REIT will have separate Class A shares, which provide shareholders with one vote for each share, and Class B shares, all of which MGM Resorts International will own and give MGM majority ownership and control of shareholder votes.
Under the REIT, MGM will pay a $550 million annual lease to continue operating the casino properties owned by the REIT. The REIT, in turn, must distribute 90 percent of its profits as shareholder dividends.
