LAS VEGAS, Oct. 29, 2015 /PRNewswire/ -- MGM Resorts
International (NYSE: MGM) ("MGM Resorts" or the "Company") today
announced that it will create a controlled real estate investment
trust ("REIT"), to be named MGM Growth Properties LLC (collectively
with its subsidiaries, "MGP"). MGM Resorts will contribute the real
estate associated with ten of its premier properties (the
"Properties") and MGP will assume approximately $4 billion of debt, which is expected to be
refinanced with the proceeds of debt and equity issuances. MGM
Resorts also announced that it confidentially submitted a draft
registration statement on Form S-11 to the SEC relating to MGP's
proposed initial public offering. MGM Resorts expects to complete
the transaction in the first quarter of 2016, subject to market
conditions and required regulatory approvals.
Key aspects of the transaction for MGM Resorts include:
- Highlighting the significant long-term value of its real estate
by creating a large, publicly traded triple-net lease REIT;
- Reducing leverage, strengthening its financial profile and
enhancing its ability to execute its growth strategy;
- Maintaining a substantial majority economic interest in MGP,
which is expected to have stable cash flows and regular
distributions;
- Leasing the properties from MGP under a long-term, triple-net
master lease;
- Continuing to operate the Properties without impact to MGM
Resorts' guests, employees, and business partners;
- Maintaining flexibility to offer additional properties to MGP
in the future; and
- Minimizing transaction costs and allowing rapid execution.
"This transaction provides MGM Resorts' shareholders numerous
strategic and financial benefits, including delevering our balance
sheet and enhancing long-term shareholder value," said Jim Murren, Chairman and CEO of MGM Resorts.
"MGM Resorts is creating a new growth platform to allow it to more
effectively execute its strategic initiatives, including portfolio
diversification."
MGM Resorts plans to contribute ten premier real estate assets
to MGP, including more than 24,000 hotel rooms and more than 2.3
million square feet of convention and meeting space. The
Properties will include:
- Seven large-scale Las Vegas
resorts and entertainment properties: Mandalay Bay, The Mirage,
Monte Carlo, New York-New York, Luxor, Excalibur, and The
Park.
- Three regional casino resort properties: MGM Grand Detroit in
Michigan and Beau Rivage and Gold
Strike Tunica, both of which are located in Mississippi.
MGM Resorts will lease the Properties under a long-term,
triple-net master lease with an initial 10-year term and four
five-year extensions at MGM Resorts' option. The master lease is
expected to provide MGP with a right of first offer with respect to
MGM Resorts' development properties in Maryland and Massachusetts. The master lease will be
guaranteed by MGM Resorts.
Murren added, "We have exhaustively and thoughtfully explored a
wide range of opportunities to leverage our valuable real estate
assets and are pleased that this transaction will further position
MGM Resorts for sustained success. Since its founding, MGM Resorts
has grown to become one of the leading hospitality companies in the
world, and under this new structure we look forward to an even
stronger future."
MGM Resorts will continue to manage and operate the Properties
and will retain 100% ownership of the Bellagio and MGM Grand Las
Vegas. The significant cash flow generated by these properties will
allow MGM Resorts to maintain its strong asset base and financial
profile. In addition, MGM Resorts will continue to own Circus
Circus Las Vegas, undeveloped land holdings, and its equity
interests in CityCenter (50%), MGM China Holdings (51%), Borgata
Hotel Casino & Spa (50%), Grand Victoria (50%), Las Vegas Arena
(50%) and Diaoyutai MGM Hospitality (49%).
The transaction is expected to be completed in the first quarter
of 2016, subject to market conditions, gaming regulatory approvals,
completion of the related financings and SEC review, and other
customary conditions. MGP will elect to be treated as a REIT
effective for the calendar year ending December 31, 2016. MGM Resorts may, at any time
and for any reason until the proposed transactions are complete,
abandon the transaction or modify or change the terms of the
transaction.
About MGM Resorts International
MGM Resorts International (NYSE: MGM) is one of the world's
leading global hospitality companies, operating a portfolio of
destination resort brands including Bellagio, MGM Grand, Mandalay
Bay and The Mirage. The Company is in the process of developing MGM
National Harbor in Maryland and
MGM Springfield in Massachusetts.
The Company also owns 51 percent of MGM China Holdings Limited,
which owns the MGM Macau resort and casino and is developing a
gaming resort in Cotai, and 50 percent of CityCenter in
Las Vegas, which features ARIA
Resort & Casino. For more information about MGM Resorts
International, visit the Company's website at
www.mgmresorts.com.
Statements in this release that are not historical facts are
forward-looking statements, within the meaning of the Private
Securities Litigation Reform Act of 1995 and involve risks and/or
uncertainties, including those described in the Company's public
filings with the SEC. The Company has based forward-looking
statements on management's current expectations and assumptions and
not on historical facts. Examples of these statements include, but
are not limited to, the Company's ability and ultimate decision to
complete the REIT transaction and related financing transactions in
the first quarter of 2016 or at all, the anticipated terms of any
such REIT transaction, including the terms of the master lease, and
the realization of any potential advantages, benefits and the
impact of, and opportunities created by, the REIT transaction.
These forward-looking statements involve a number of risks and
uncertainties. Among the important factors that could cause actual
results to differ materially from those indicated in such
forward-looking statements include the operational complexities to
be addressed by the Company to address to effect the REIT
transaction, the ability and timing of the Company's receipt of
regulatory approvals (including approval from gaming regulators)
regarding the REIT transaction, effects of economic conditions and
market conditions in the markets in which the Company operates and
the REIT will operate, the condition of the U.S. debt and equity
capital markets, the design, timing and costs of expansion
projects, risks relating to international operations, permits,
licenses, financings, approvals and other contingencies in
connection with growth in new or existing jurisdictions and
additional risks and uncertainties described in the Company's Form
10-K, Form 10-Q and Form 8-K reports (including all amendments to
those reports). In providing forward-looking statements, the
Company is not undertaking any duty or obligation to update these
statements publicly as a result of new information, future events
or otherwise, except as required by law. If the Company updates one
or more forward-looking statements, no inference should be drawn
that it will make additional updates with respect to those other
forward-looking statements.
MGM RESORTS
CONTACTS:
|
Investment
Community
|
News
Media
|
CATHERINE
PARK
|
CLARK
DUMONT
|
Executive Director
of Investor Relations
|
Senior Vice President
of Corporate Communications
|
(702)
693-8711
|
(702) 692-6888 or
cdumont@mgmresorts.com
|
|
|
|
MEAGHAN REPKO / NICK
LAMPLOUGH
|
|
Joele Frank,
Wilkinson Brimmer Katcher
|
|
(212)
355-4449
|
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SOURCE MGM Resorts International