MGM Resorts International to Sell Bellagio Las Vegas For $5 Billion

One of the biggest US casino operators, MGM Resorts International, will sell the legendary venue Bellagio Las Vegas prior to the formation of a t venture with Blackstone Real Estate Income Trust. The total deal of this will be worth $4.25 billion.

It will be in this venture that Bellagio will be acquired and leased to MGM’s subsidiary for annual rent totaling $245 million. There will be a 5% equity interest in it for MGM that will cash out cca $4.2 billion.

Building a Fortress Balance Sheet

The finalization of this deal should be completed before the end of the year…

…while MGM is busy selling yet another property – Circus Circus, also Las Vegas-based, to Treasure Island owner, Phil Ruffin . This particular sale should bring another $825m to the operator. The total sum will be comprised of $662.5m in cash and $262.5m note due 2024. This particular deal should be complete during this final quarter of the year.

Jim Murren, CEO and Chairman of MGM Resorts, has confirmed that funds earned from both properties will be used to build a fortress balance sheet and return capital to their shareholders.

He added: “These transactions enhance the company’s strategic and operational flexibility and reinforce its commitment to targeted new growth opportunities, including securing and investing in one of the integrated resort licenses in Japan and becoming an industry leader in sports betting in the US .”

“MGM Resorts has engaged in an exhaustive process to evaluate its owned real estate and remains committed to executing its asset-light strategy in a measured way that maximizes value for its shareholders. We remain committed to delivering on our 2020 goals and continue to be on track to achieve our previously announced targets.”

Thrilled to Acquire Bellagio

Blackstone president and CEO, Jon Gray, also commented by stating that “as big believers in MGM Resorts and Las Vegas, we are thrilled to partner with MGM to acquire the Bellagio on behalf of our BREIT investors. We look forward to a long and productive partnership with this world-class company.”

MGM Resorts has kickstarted their t venture with GVC Holdings, Roar Digital, after launching BetMGM online sports betting app in New Jersey. These sale agreements come just after these two momentous events.

BetMGM replaced the PlayMGM app that was presented in 2017. It features new GVC sportsbook platform and traditional casino games that were offered by the PlayMGM app as well.

Buffalo Wild Wings became the official partner of Roar Digital. This sports bar and restaurant chain will deliver sports betting experiences tly with punters across the country with the brand.

Source:

“MGM Resorts to sell Bellagio and Circus Circus for over $5bn”, igbnorthamerica.com, October 18, 2019.