Possible selling of Las Vegas casinos.
Once more, it has come to light that MGM Resorts International is planning to sell two iconic hotel and casino complexes on the Las Vegas Strip: the MGM Grand and the Mandala Bay Resorts & Casinos. Reports suggest that numerous large companies are on the verge of acquiring these gambling powerhouses, which could result in one of the most significant real estate deals in the US.
Not long ago, Caesars Entertainment made headlines for considering selling its own Rio All-Suite Hotel & Casino. In October of last year, whispers started circulating that MGM Resorts was also considering selling top-notch properties from their real estate portfolio. It now appears that these were not mere speculations.
"This transaction enables Caesars Entertainment to concentrate its resources on enhancing our attractive portfolio of recently renovated Strip properties. These properties are expected to provide us with improved operating results."
The purchase of the Rio All-Suite Hotel & Casino was smaller in comparison to the current announcement. The sale in October saw Imperial Companies transferring US$ 517 million to Caesars Entertainment.
MGM Grand and Mandala Bay Resorts & Casinos are not small hotel-casino complexes, even though MGM Resorts, as an operator, ranks just behind the Caesars Group among the world's largest casino operators.
The value of the forthcoming deal has not yet been disclosed, but it's worth noting that the completed joint venture with MGM Resorts will only occur a few months after the real estate company acquired the Bellagio Hotel and Casino for US$ 4.25 billion. This deal took place in October.
Jim Murren, CEO of MGM Resorts, spoke to the Financial Times, explaining the rationale behind the sale.
"These announcements are a milestone in the execution of the company's previously communicated asset-light strategy, one that will allow MGM Resorts to possess an outstanding balance sheet with strong free cash flow generation, granting the company exceptional strategic flexibility and ongoing value creation for shareholders."
The news that Circus Circus, also a property under MGM Resorts' ownership, is to be sold in the near future might not be politically irrelevant. The potential buyer here is Phil Ruffin, who shares a close business relationship with US President Donald Trump.
In an interview with Bloomberg, Murren revealed that these sales are part of a strategic realignment arising from the changes in the gaming industry. In the near future, the focus will again be on sport and entertainment, hinting at a possible involvement in the sports betting sector, a possibility triggered by the opening of the US market for private sports betting.
"The casino industry is evolving, and we believe the best way to utilize our intellectual capital is to focus on sports, live entertainment, and reducing leverage."
Eventually, the joint venture will be owned almost 50-50 by MGM Growth Properties and Blackstone. MGM Growth Properties will supposedly end up with a tad over 50% of the ownership. The plan is for them to lease these properties back to MGM Resorts after the purchase, allegedly for an annual rent of US$ 292 million. However, the shares of both Blackstone and MGM remain unchanged since these updates. Tourists visiting the hotel-casino complexes in Las Vegas are unlikely to notice any practical differences in the sale transactions.
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Source: www.onlinecasinosdeutschland.com
