April 8, 2016 / 6:55 PM / 4 years ago

MGM Growth to start marketing year's biggest U.S. IPO next week: sources

(Reuters) - Real estate investment trust MGM Growth Properties LLC will start marketing its U.S. initial public offering to investors on Monday, in a road show targeting as much as $1.2 billion in the largest IPO so far this year, sources said on Friday.

A successful offering by MGM Growth would show that the stock market is gradually opening up for big IPOs, which have been sitting on the sidelines for months as volatility has rocked the market. It could raise almost double the $626 million that has been amassed in U.S. IPOs so far this year by 35 other companies, according to Thomson Reuters Data.

MGM Growth Properties, backed by gaming and hospitality company MGM Resorts International Inc (MGM.N), said in a regulatory filing on Friday it would seek to sell 50 million shares, priced between $18 and $21. It will use the proceeds to pay down debt.

The sources who spoke about the timing of the road show asked not to be identified because no public announcement has been made. MGM Growth Properties did not respond to requests for comment.

Other smaller IPOs are also attempting to brave the market. Exchange operator Bats Global Markets Inc launched its IPO road show this week, while Dell Secure Works, a cybersecurity firm owned by Dell, is expected to launch its IPO road show next week.

Total IPO proceeds raised so far this year are down 89 percent from the $5.9 billion raised last year.

Las Vegas, Nevada-based MGM Growth Properties owns a portfolio of casino resort properties carved out of MGM Resorts. Six of these nine properties are on the Las Vegas Strip, including Mandalay Bay and the Mirage. MGM Resorts shareholders will own roughly 76 percent of MGM Growth Properties.

MGM Resorts launched the real estate investment trust after pressure from activist fund Land and Buildings, which cited a similar separation from Penn National Gaming Inc (PENN.O) of Gaming and Leisure Properties Inc (GLPI.O). GLPI’s stock price, now at roughly $32, has been steadily increasing from late February, when it traded at $25.

Shares of MGM Growth Properties will list on the New York Stock Exchange under the ticker “MGP.”

BofA Merrill Lynch, J.P. Morgan, Morgan Stanley, Evercore ISI, Barclays, Citi and Deutsche Bank are the joint bookrunners on MGM Growth Properties’ IPO.

Reporting by Lauren Hirsch in New York; Editing by Matthew Lewis

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