MGM initiates talks to sell Mirage Casino
CEO Bill Hornbuckle revealed that MGM Resorts International was in the initial stages of selling The Mirage’s operations.
US.- MGM Resorts International confirmed on its third-quarter earnings conference call that it started the sale process for the Mirage on the Las Vegas Strip. There were no deadlines or potential buyers for the Mirage sale.
The Mirage, which opened on the Las Vegas Strip in 1989, has been an emblematic property of the Vegas action since then. In 2000, the operator previously known as MGM Grand doled out $4.4bn to acquire the company then known as Mirage Resorts. The Bellagio, Treasure Island, a 50 per cent stake in the Monte Carlo and other Nevada gaming venues as well as casinos in Australia, Detroit and Mississippi were also included in that deal.
In a letter sent to all MGM employees, CEO Bill Hornbuckle, said: “Today we are announcing that, after careful consideration, we have made the decision to sell the operations of The Mirage to another operator, a move that we believe is best for the long-term success of both the property and MGM Resorts.”
Mirage’s real estate is owned by MGM Growth Properties, the gaming real estate investment trust (REIT) spun-off by MGM in 2016. Vici Properties is in the process of acquiring MGP for $17.2bn in equity.
This includes $5.7bn in debt. MGM Growth owns the Las Vegas Strip properties Mandalay Bay and Luxor as well as Excalibur, Luxor, Excalibur, and MGM Grand Las Vegas.
MGM Resorts recently completed transactions that allowed it to separate the ownership of the property and the casino operations.
MGM Resorts closed in September a deal to acquire full ownership of CityCenter on the Las Vegas Strip. This complex agreement allowed MGM Resorts to both sell the realty and still earn all the revenue from the enormous Strip casino. The company also agreed to purchase The Cosmopolitan of Las Vegas operations from Blackstone for $5.65bn. The property will be acquired by a Blackstone REIT.
MGM didn’t say what the asking price is for Mirage’s operation, but on the conference call, an analyst said the sale could generate $500m to $600m in proceeds for the seller. That’s far less than what it paid for Cosmopolitan’s rights and well below the $2.25bn Apollo Global Management is paying for the rights to Venetian and Sands Expo & Convention Center.
Even though MGM didn’t comment on potential suitors, there was recent talk Ruffin could make a run at Mirage due to the property being connected by tram to his Treasure Island, but that chatter died down. Golden Nugget boss, Tilman Fertitta, has long coveted a Strip asset. Hard Rock International has also been mentioned online as a possible Mirage suitor.
