MGM Growth Properties LLC (NYSE: MGP) (the "Company") today announced that it has priced its previously announced underwritten public offering of 30,000,000 ClassA shares (the "shares") at a public offering price of $31.25 per share. The Company will issue and sell 18,000,000 shares directly to the underwriters at closing and 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). The Company expects to receive net proceeds from the sale of the 18,000,000 shares sold directly to the underwriters of $540.8million, or $676.1million if the underwriters exercise their overallotment option to purchase additional shares in full. As part of the offering, the Company also granted the underwriters a 30-day overallotment option to purchase up to an additional 4,500,000 shares from the Company. The 30,000,000 shares represented an increase of 6,000,000 shares from the original offering size of 24,000,000 shares. The offering is expected to close on November22, 2019, subject to customary closing conditions.
The Company has entered 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 18,000,000 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 are acting as joint lead book-running managers for the offering. Citigroup, Barclays and Scotiabank are acting as joint book-running managers for the offering. BNP PARIBAS, Citizens Capital Markets, Credit Agricole CIB, Deutsche Bank Securities, Fifth Third Securities, SMBC, SunTrust Robinson Humphrey and UBS Investment Bank are acting as senior co-managers for the offering. KeyBanc Capital Markets, Comerica Securities, Ladenburg Thalmann and Union Gaming are acting as co-managers for the offering.