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

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 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.