LAS VEGAS, Jan. 29, 2019 /PRNewswire/ -- MGM Resorts
International ("MGM Resorts") (NYSE: MGM) and MGM Growth Properties
LLC ("MGP") (NYSE: MGP) announced today that they have completed
the transactions for the acquisition of Empire City Casino in
Yonkers, New York ("Empire City").
Following MGM Resorts' acquisition of Empire City for approximately
$850 million, MGP acquired the
developed real property from MGM Resorts for approximately
$625 million and leased it back to a
subsidiary of MGM Resorts that will operate the property.
"We are pleased to welcome the 1,200 employees at Empire City
Casino to the MGM Resorts family," said Jim Murren, Chairman
and CEO of MGM Resorts. "Over the past three years, we have
established a meaningful presence in the northeast with Borgata in
Atlantic City, MGM National Harbor
in Maryland, and MGM Springfield
in Western Massachusetts. With
this new addition to the MGM Resorts portfolio, we have now gained
a foothold in the high-density New York
City region and we look forward to leveraging the MGM
platform to maximize value in this evolving marketplace."
"What's incredibly exciting is the amount of opportunity MGM
Resorts will bring to the employees at Empire City, as well as
Westchester County, the city of
Yonkers, and the State of New York," said Timothy J. Rooney, President and CEO of Empire
City Casino. "With destinations throughout the world, from resorts
to casinos to entertainment, MGM has a tried-and-true formula for
success. They know how to build and grow properties that
continually raise the bar in entertainment, travel, and leisure,
and we are so thrilled to leave Empire City in MGM's capable hands.
What's more, the potential for growth at Empire City has absolutely
no boundaries. MGM will truly provide Empire City employees and the
property's guests with the resources and opportunities to make the
casino and track into something we haven't even yet realized. I
cannot wait to see what's to come!"
"Today, we continue to expand MGP's best-in-class portfolio with
the acquisition of the real estate assets of Empire City, expanding
our geographic footprint to the New York
City metropolitan area," said James
Stewart, CEO of MGM Growth Properties. "This financially
accretive transaction further diversifies our existing
market-leading regional portfolio and provides us with additional
growth opportunities with a Right of First Offer on any potential
capital improvements in the future. This is another excellent
example of the power of our partnership with MGM Resorts."
MGM Resorts' funded the acquisition with approximately
$360 million of cash on hand, the
issuance of approximately 9.4 million shares of common stock, based
on a volume weighted average price of a share of the Company's
common stock for a ten-trading-day period prior to the closing
date, and the assumption of approximately $246 million in indebtedness. MGM Resorts has
also agreed to pay an additional $50
million if Empire City is awarded a license for live table
games on or prior to December 31,
2022 and MGM Resorts accepts such license by December 31, 2024.
MGP funded the acquisition of the developed real property from
MGM Resorts through the assumption of approximately $246 million of indebtedness, which was repaid
with borrowings under its senior secured credit facility, and the
issuance of approximately 13 million operating partnership units to
MGM Resorts based upon MGP's closing price of $29.38 as
of May 25, 2018. In addition, MGM Resorts has agreed to give
MGP a right of first offer with respect to certain undeveloped land
adjacent to the property to the extent MGM Resorts develops
additional gaming offerings and chooses to sell or transfer the
property in the future.
Empire City was added to the existing Master Lease between MGM
Resorts and MGP, and the initial rent payment to MGP increased by
$50 million. Consistent with the
Master Lease terms, 90 percent of the increased rent will be
contractually fixed to grow at two percent per year until 2022, and
thereafter will continue to grow provided a tenant revenue to rent
ratio is met. The remaining 10 percent is payable in percentage
rent.
Empire City sits on a 97-acre property and serves approximately
16 million eligible gaming customers in southern New York. It is located only 15 miles from
Times Square in Manhattan.
Offering gaming, racing, dining, and entertainment, Empire City
features over 5,200 of the latest slots and electronic table games,
multiple dining outlets, and both live and simulcast horse
racing.
BofA Merrill Lynch acted as exclusive financial advisor to MGM
Resorts in connection with the transaction. PJT Partners LP is
acting as financial advisor to the conflicts committee of the MGP
Board of Directors.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of
these securities in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state or
jurisdiction.
About MGM Resorts International
MGM Resorts
International (NYSE: MGM) is an S&P 500® global entertainment
company with national and international locations featuring
best-in-class hotels and casinos, state-of-the-art meetings and
conference spaces, incredible live and theatrical entertainment
experiences, and an extensive array of restaurant, nightlife and
retail offerings. MGM Resorts creates immersive, iconic experiences
through its suite of Las Vegas-inspired brands. The MGM
Resorts portfolio encompasses 29 unique hotel and destination
gaming offerings including some of the most recognizable resort
brands in the industry. Expanding throughout the U.S. and around
the world, the company acquired the operations of Empire City
Casino in New York in 2019, and in
2018, opened MGM Springfield in Massachusetts, MGM COTAI in Macau, and the first Bellagio-branded hotel in
Shanghai. The over 82,000 global
employees of MGM Resorts are proud of their company for being
recognized as one of FORTUNE® Magazine's World's Most Admired
Companies®. For more information visit us
at www.mgmresorts.com.
About MGM Growth Properties
MGM Growth Properties LLC
(NYSE:MGP) is one of the leading publicly traded real estate
investment trusts engaged in the acquisition, ownership and leasing
of large-scale destination entertainment and leisure resorts, whose
diverse amenities include casino gaming, hotel, convention, dining,
entertainment and retail offerings. MGP currently owns a portfolio
of properties, consisting of 11 premier destination resorts
in Las Vegas and elsewhere across the United States, the Park, a dining and
entertainment complex which opened in April 2016, and the Hard
Rock Rocksino Northfield Park in Northfield, OH. As of December 31, 2017,
these properties collectively comprise approximately 27,500 hotel
rooms, 2.7 million convention square footage, 150 retail outlets,
300 food and beverage outlets and 20 entertainment venues. As a
growth-oriented public real estate entity, MGP expects its
relationship with MGM Resorts and other entertainment providers to
attractively position MGP for the acquisition of additional
properties across the entertainment, hospitality and leisure
industries. For more information about MGP, visit the Company's
website at http://www.mgmgrowthproperties.com.
Forward-Looking Statements
Statements in this release
that are not historical facts are "forward-looking" statements and
"safe harbor statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 that involve risks and/or
uncertainties, including those described in MGM Resorts' and MGP
public filings with the SEC. MGM Resorts and MGP have 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, statements regarding
the Company's ability to generate future growth at Empire City.
Among the important factors that could cause actual results to
differ materially from those indicated in such forward-looking
statements include effects of economic conditions and market
conditions in the markets in which MGM Resorts and MGP operate,
competition with other destination travel locations
throughout the United States and the world, 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 MGM Resorts' and MGP Form 10-K, Form 10-Q
and Form 8-K reports (including all amendments to those reports).
In providing forward-looking statements, neither MGM Resorts or MGP
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 MGM Resorts 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.
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SOURCE MGM Resorts International; MGM Growth Properties LLC