Treasure Island owner Phil Ruffin has agreed to purchase Circus Circus Las Vegas for $825 million from MGM Resorts International.
LAS VEGAS, Oct. 15, 2019 -- MGM Resorts International (the "Company" or "MGM Resorts") (NYSE:MGM) today announced that it has entered into a definitive agreement to sell Circus Circus Las Vegas for $825 million to an affiliate of Treasure Island owner Phil Ruffin. For the 12 months ending June 30, 2019, the property reported Adjusted Property EBITDA of $62 million.
"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," said Jim Murren, Chairman and CEO of MGM Resorts. "The Company expects to utilize the proceeds from this transaction to enhance its capital allocation strategy and complement its strategic and operational flexibility."
Mr. Ruffin added, "Circus Circus has anchored the north end of the Las Vegas Strip for over 50 years, and I am excited to add it to my casino portfolio. I have tremendous respect for Jim Murren and the MGM team, and my relationship with them goes back to my friendship with Kirk Kerkorian and continues to this day."
The Company acquired Circus Circus Las Vegas in connection with its acquisition of Mandalay Resort Group in 2005. Originally opened in 1968, today the property has 2,300 employees and is home to the Adventuredome (a 5-acre indoor amusement park), a 10-acre RV park, and 37-acre festival grounds.
"On behalf of the entire MGM Resorts family, we would like to thank our dedicated employees who have worked diligently to ensure the long-term success of this iconic property," said Ann Hoff, President and COO of Legacy Portfolio Properties.
The $825 million purchase price will comprise $662.5 million paid in cash and a $162.5 million note due 2024.
The transaction is expected to close in the fourth quarter of 2019 subject to customary closing conditions, including receipt of necessary regulatory approvals. The Company expects to record a third quarter impairment charge of approximately $220 million in connection with this transaction.
Morgan Stanley & Co. LLC and CBRE are serving as financial advisors to MGM Resorts.
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