MGM Resorts International is putting the Bellagio into a joint venture controlled by a Blackstone Group Inc real-estate investment trust. MGM is to hold a 5% stake in the venture and $4.2 billion cash and will continue to operate the hotel and casino, which it will rent from the venture for $245 million a year. The transaction values Bellagio at $4.25 billion, the company said. [WSJ]
MGM said it is separately selling another Strip casino, Circus Circus, to an associate of Phil Ruffin, who owns Treasure Island in Las Vegas, for $825 million.
Capital needed for expansion in Japan
Japan’s move last year to legalize gambling opened the way for global casino operators to pursue licenses there.
MGM Resorts has adopted what it calls its “Osaka-first” strategy, pouring its efforts into securing a license in that city.
Asset light
MGM could also look to wring some value from its 50 percent interest in mixed-use complex CityCenter, as well its 68 percent stake in MGM Growth Properties (NYSE:MGP). [casino.org]
The company stated its intention to reduce domestic net debt/EBITDA (on a restricted group basis) to about 1.0x – Moody’s