LAS VEGAS, Nov. 19, 2019 /PRNewswire/ -- MGM Growth Properties LLC /zigman2/quotes/206491780/composite MGP +0.47% (the "Company") today announced that it has commenced an underwritten public offering of 24,000,000 Class A shares (the "shares"). The Company expects that it will issue and sell 12,000,000 shares directly to the underwriters at closing and that the underwriters will purchase, at the request of the Company, 12,000,000 shares from the forward purchasers (or their affiliates) under the forward sale agreements (in each case, as described below). As part of the offering, the Company also intends to grant the underwriters a 30-day overallotment option to purchase up to an additional 3,600,000 shares from the Company.
The Company expects to enter into forward sale agreements with each of J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and BofA Securities (or their respective affiliates) (who are referred to in this capacity as the "forward purchasers") with respect to 12,000,000 shares. In connection with the forward sale agreements, the forward purchasers or their affiliates are expected to borrow and sell to the underwriters an aggregate of 12,000,000 shares that will be delivered in the offering.
Pursuant to the terms of the forward sale agreements, and subject to its right to elect cash or net share settlement under certain conditions, the Company intends to deliver, upon full physical settlement of such forward sale agreements on one or more dates specified by the Company occurring no later than approximately nine months following the completion of the offering, an aggregate of 12,000,000 shares to the forward purchasers in exchange for cash proceeds per share equal to the applicable forward sale price, which will initially be the public offering price less the underwriting discount and will be subject to certain adjustments as provided in the forward sale agreements.
The Company will receive proceeds from its direct sale of 12,000,000 shares in the offering, but it will not initially receive any proceeds from the sale of shares by the forward purchasers or their affiliates, except in certain circumstances described in the prospectus supplement related to the offering. The Company plans to use the net proceeds from the sale of shares in the offering and the physical settlement of the forward sale agreements primarily to repay a portion of the borrowings outstanding under its senior secured term loan A facility and senior secured term loan B facility, which the Company believes will well-position it to be able to agree to and consummate a potential joint venture transaction under discussion with MGM Resorts International ("MGM") and honor any potential redemption of units representing limited partnership units in MGM Growth Properties Operating Partnership LP held by MGM for cash, should MGM elect to exercise any redemption right, if the Company decides to pursue such a transaction, or, alternatively, for general corporate purposes, which could include, among other things, financing future acquisitions or investment opportunities, working capital or to repay other indebtedness. Any proceeds received in connection with the exercise by the underwriters of their overallotment option to purchase additional shares will be used to repay a portion of the borrowings outstanding under the Company's senior secured term loan A facility or for general corporate purposes.
J.P. Morgan, Morgan Stanley, BofA Securities and Evercore will be acting as joint lead book-running managers for the offering.
The offering of these securities is being made pursuant to an effective shelf registration statement previously filed by the Company with the Securities and Exchange Commission ("SEC"). A preliminary prospectus supplement and accompanying prospectus relating to the offering will be filed with the SEC and will be available on the SEC's website. When available, a copy of the prospectus relating to the offering may be obtained from J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, Telephone: (866) 803-9204; Morgan Stanley & Co. LLC, Attn: Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014; BofA Securities, NC1-004-03-43, 200 North College Street, 3rd floor, Charlotte NC 28255-0001, Attn: Prospectus Department, Email: email@example.com ; Evercore Group L.L.C., Attn: Equity Capital Markets, 55 East 52nd Street, 35th Floor, New York, New York 10055, Email: firstname.lastname@example.org , or (888) 474-0200; or by visiting the EDGAR database on the SEC's web site at www.sec.gov .
This press release does not constitute an offer to sell or a solicitation of an offer to buy the shares, nor shall there be any offer, solicitation or sale of any shares in any jurisdiction in which such offer, solicitation or sale would be unlawful. Any offer or sale will be made only by means of the Company's prospectus supplement and the base prospectus forming part of the effective registration statement relating to the shares.
Statements in this release that are not historical facts are "forward-looking" statements and "safe harbor statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and/or uncertainties, including those described in the Company's public filings with the Securities and Exchange Commission. The Company has based forward-looking statements on management's current expectations and assumptions and not on historical facts. These forward-looking statements involve a number of risks and uncertainties and the important factors that could cause actual results to differ materially from those indicated in such forward-looking statements include risks related to the Company's ability to receive, or delays in obtaining, any regulatory approvals required to own its properties, its ability to consummate any potential joint venture transaction and related transactions with MGM and/or unaffiliated third parties, and the ability to recognize any anticipated benefits from such transactions if they are consummated, or other delays or impediments to completing the Company's planned acquisitions or projects, including any acquisitions of properties from MGM; the ultimate timing and outcome of any planned acquisitions or projects; the Company's ability to maintain its status as a REIT; the availability of and the ability to identify suitable and attractive acquisition and development opportunities and the ability to acquire and lease those properties on favorable terms; the Company's ability to access capital through debt and equity markets in amounts and at rates and costs acceptable to the Company; changes in the U.S. tax law and other state, federal or local laws, whether or not specific to REITs or to the gaming or lodging industries; and other factors described in the Company's periodic reports filed with the Securities and Exchange Commission. In providing forward-looking statements, the Company is not undertaking any duty or obligation to update these statements publicly as a result of new information, future events or otherwise, except as required by law. If the Company updates one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those other forward-looking statements.
SOURCE MGM Growth Properties LLC
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