MGM Resorts and MGP entered a definitive agreement that establishes that a subsidiary of the latter will buy National Harbor assets.
US.- MGM Resorts International and MGM Growth Properties LLC (MGP) revealed yesterday that they entered a definitive agreement in which a subsidiary of MGP will purchase the long-term leasehold interest and real property investments associated to MGM National Harbor, located in Maryland.
MGM Resorts said that it’s set to lease the property from MGP and will continue to run the operations following the operation, with no significant changes as to employees, customers, etc. MGP will pay US$1.1 billion, which consists of US$462 million in cash, US$425 million of secured indebtedness of MGM National Harbor, LLC and the issuance by MGP’s subsidiary MGM Growth Properties Operating Partnership LP, which translates into a US$200 million operating partnership, PRNewswire revealed.
The top scorer gambling facility from Maryland will be added to the Master Lease between MGP and MGM Resorts, consisting of a 90 percent to be fixed and grow at 2 percent each year until 2022. The sale is now subject to regulatory approvals and other conditions and is expected to be closed during the fourth quarter of the year.
James Stewart, CEO of MGP, said: “We are excited to welcome MGM National Harbor to our portfolio and expand our geographic presence on the East Coast. As a result of this transaction, we expect to achieve mid-single digit percentage accretion to AFFO per share, while maintaining our balance sheet flexibility. Since MGP’s IPO last year, we have worked diligently to increase value for our shareholders and we remain focused on continuing to drive prudent growth through future transactions.”
Moreover, Chairman and CEO of MGM Resorts, Jim Murren, said that the company believes that the accretive transaction with MGM Growth Properties serves he best interests of the shareholders of both companies and demonstrates the team’s ability to deliver on the long-term plan. “MGM National Harbor has exhibited strong financial performance and has already secured its place as the leading resort in its market. We will continue to support MGP as it drives future growth through the expansion of its quality asset portfolio,” he added.