MGM Resorts International Sells Its Most Prominent Casino
Recently, the Las Vegas Strip’s business landscape experienced two dramatic developments. It is when the MGM Resorts International sold two of its most outstanding casino assets.
Moreover, Nevada gaming officials moved to bar a humiliated industry legend from doing business in Sin City.
MGM Resorts has sold the Circus Circus to casino entrepreneur Phil Ruffin, owner of the Treasure Island Hotel and Casino. It was purchased in deal value of $825 million, including $662.5 million in cash.
According to a news report, by the end of fiscal 2019, the transaction is expected to close.
In a partitioned deal valued at $4.25 billion, MGM indicated it would place the Bellagio into a shared real estate venture. This is with the Blackstone Group as a governing associate.
MGM will hold a five percent share in the deal. In addition, it will retain the functional control over the Bellagio for $245 million in rent.
In a statement, MGM Resorts CEO and Chairman Jim Murren stated, “This transaction confirms the premium value of our owned real estate assets, highlights the unique value of Bellagio as a premier asset in gaming and solidifies our status as a premier operator of gaming and entertainment properties.”
Assessment of Potential Real-Estate Sales
He also added, “We will use the proceeds from this transaction, together with the proceeds from the pending sale of Circus Circus Las Vegas, to build a fortress balance sheet and return capital to shareholders.”
The two combined transactions will let MGM have a net of more than $5 billion.
The casino chain has always been evaluating potential real-estate sales. This is as a means of paying down its responsibility and providing insurance during times of financial downturns, such as a recession.
According to the Las Vegas Review-Journal, the Bellagio and Circus Circus were two of the last three remaining properties on the Strip, where MGM possesses the underlying real estate.
The MGM Grand was the third hotel on the Strip.
So far this year, its stocks are up more than 10 percent. Meanwhile, MGM shares were flat after the trading on Tuesday.
