MGM Resorts Makes Deals To Sell Two Las Vegas Casinos

MGM Resorts International (NYSE: MGM) has made deals to sell two of its casinos on the Las Vegas Strip. The deals are expected to close by the end of the year, subject to regulatory approvals, and net the company roughly $5 billion, which it plans to use to shore up its balance sheet and return capital to shareholders. The sales are based on the recommendations of a committee formed to look into the company’s real estate and determine how to monetize it.

MGM has made a deal to sell Circus Circus to resort owner Phil Ruffian for $825 million. Ruffin also owns the Treasure Island resort and casino and half of the Trump International Hotel with President Donald Trump. Circus Circus opened in 1968 and quickly became one of the most recognizable casinos in Vegas. The deal includes a hotel, casino and amusement park on 102 acres.

MGM is also entering into a lease-back deal for the Bellagio with private equity firm Blackstone. The deal will net MGM about $4.2 billion in cash and it will retain 5 percent equity in Bellagio. Blackstone will take control of the Bellagio’s land and MGM will pay $245 million in annual rent to operate the hotel.

MGM Resorts CEO Jim Murren said that the proceeds from the sale will also be used to fund an international expansion and expansion into sports betting in the United States. He said in a statement, “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 U.S.”