MGM Growth Properties: Let It Ride On VICI Merger
Summary
- There is little arb opportunity left in the MGP-VICI deal but also low risk of it falling through.
- Owning MGP now will get you VICI at a 1.6% discount and a slightly higher dividend before the merger closes.
- The combined REIT will own one-of-a-kind properties on the Las Vegas Strip and regional casinos with insurmountable barriers to entry.
- The companies collected all rent payments during the pandemic and have long-term contracts with rent escalators.
- The debt could be upgraded to investment grade, allowing for additional accretive growth in the future.
Analyst’s Disclosure:I/we have a beneficial long position in the shares of MGP either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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