MGM Resorts International announced an agreement to sell the operation of The Mirage Hotel & Casino to Hard Rock International for $1.075 billion in cash, subject to customary working capital adjustments.
“This deal represents an important milestone for MGM Resorts and Las Vegas,” said Bill Hornbuckle, CEO and president of MGM Resorts International. “As part of the team that opened Mirage in 1989, I know firsthand how special it is and how great opportunities it presents for the Hard Rock team. I want to thank all the Mirage employees for over 30 years who have consistently provided guests with world-class gaming and entertainment experiences.”
“This announcement marks the culmination of a series of innovative deals for MGM Resorts over the past few years,” said Paul Salem, chairman of the board of directors of MGM Resorts International. “The monetization of our entire property portfolio, along with the addition of the City Center and the Las Vegas Cosmopolitan acquisition agreement, will position the company as a fortress balance sheet, best portfolio, and critical financial resource to pursue strategic goals.”
For the 12 months ended December 31, 2019, The Mirage reported adjusted property EBITDA of $154 million. At the close of the transaction, the master lease at MGM Resorts, which now includes The Mirage property, will be revised, reducing its annual rent by $90 million. The Company expects net cash income to be approximately $815 million after taxes and estimated fees.
“It’s a fantastic result for the company because we can re-prioritize future capital expenditures for opportunities to improve customer experience at different locations in Las Vegas,” said Jonathan Halkyad, MGM Resorts International CFO and treasurer. “We appreciate Mirage’s property owner VICI working with Hard Rock to facilitate new lease agreements once the acquisition of MGM Growth Properties closes.”
Halkyard concluded, “With regard to the use of proceeds, we will remain the regulated allocator of capital to maximize shareholder value. This consists of maintaining a strong balance sheet, returning cash to shareholders, and pursuing targeted growth opportunities that advance our vision as the world’s leading gaming entertainment company.”
The Mirage opened in 1989 and was acquired by MGM Resorts in 2000. Located in the heart of the Las Vegas Strip, the iconic building is known worldwide for its 90-foot (about 1 m) strip volcano, as well as dynamic entertainment options. 온라인경마
Under the terms of the agreement, MGM Resorts will retain the name and brand of The Mirage and license it with no Hard Rock royalties for up to three years.
The deal is expected to close in the second half of 2022, subject to regulatory approvals and other customary closing conditions.
BofA Securities and PJT Partners served as financial advisers, and Weil, Gotshal & Manges LLP served as legal advisers to MGM Resorts.