MGM sells iconic Las Vegas casino for $4.2 billion
The iconic United States based casino firm MGM Resorts International proposed to sell the Las Vegas Strip resort the Bellagio in a $4.2 billion deal. They also sold the Circus Circus Las Vegas venue for $825 million. The company announced that they have agreed to form a joint venture with the Blackstone Real Estate Income Trust that will eventually purchase the property and the MGM resorts subsidiary will pay $245 million in annual rent.
Both deals will bring in billions in cash, it can provide a strong benchmark for MGM. This opportunity will give the company a chance to reduce debt and free up cash to make future investments, which includes the development of resorts in Japan as well as the involvement in the growing US sports betting industry.
MGM Chairman and CEO 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, 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.”
MGM Resorts was under severe financial pressure for a period after the global financial crisis of 2007-2008 that proved to be tough for the firm’s major spending on a hotel and gaming development on the Las Vegas Strip then called the CityCenter complex.
The company agreed that MGM Resorts is expanding and evolving towards a developer, manager, and operator of leading gaming, entertainment and hospitality. They further added, “Between the Bellagio transaction and the pending Circus Circus sale, the Company is expecting to receive gross proceeds of approximately US$5 billion and estimated net cash proceeds of US$4.3 billion.”
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