LAS VEGAS, Dec. 13, 2021 /PRNewswire/ -- MGM Resorts
International ("MGM Resorts" or the "Company") (NYSE: MGM) today
announced it has reached an agreement to sell the operations of The
Mirage Hotel & Casino ("The Mirage") to Hard Rock International
("Hard Rock") for $1.075 billion in
cash, subject to customary working capital adjustments.
"This transaction is a significant milestone for MGM Resorts,
and for Las Vegas," said
Bill Hornbuckle, CEO &
President, MGM Resorts International. "As part of the team that
opened The Mirage in 1989, I know firsthand how special it is, and
what a great opportunity it presents to the Hard Rock team. I want
to thank all of our Mirage employees who have consistently
delivered world-class gaming and entertainment experiences to our
guests for more than three decades."
"This announcement marks the culmination of a series of
transformational transactions for MGM Resorts during the last
several years," said Paul Salem,
Chairman of the Board of Directors, MGM Resorts International. "The
monetization of our entire real property portfolio, together with
the addition of CityCenter and our agreement to acquire The
Cosmopolitan of Las Vegas, will
position the Company with a fortress balance sheet, premier
portfolio, and significant financial resources to pursue our
strategic objectives."
For the twelve months ended December 31,
2019, The Mirage reported Adjusted Property EBITDAR of
$154 million. At the closing of the
transaction, MGM Resorts' master lease that currently includes The
Mirage property will be amended to reduce the annual rent by
$90 million. The Company expects net
cash proceeds after taxes and estimated fees to be approximately
$815 million.
"This is a fantastic outcome for the Company, as we are able to
re-prioritize future capital expenditures toward opportunities that
will enhance the customer experience at our other locations in
Las Vegas," said Jonathan Halkyard, CFO & Treasurer, MGM
Resorts International. "We appreciate VICI, as the real estate
owner of The Mirage once its acquisition of MGM Growth Properties
closes, working constructively with Hard Rock to facilitate a new
lease agreement."
Halkyard concluded, "As it relates to use of proceeds, we will
remain disciplined allocators of our capital to maximize
shareholder value. This consists of maintaining a strong balance
sheet, returning cash to shareholders, and pursuing targeted growth
opportunities that advance our vision to be the world's premier
gaming entertainment company."
The Mirage opened in 1989 and was acquired by MGM Resorts
in 2000. The iconic property, located at the heart of the Las Vegas
Strip, is known worldwide for its 90-foot Strip-side volcano, as
well as for its dynamic entertainment options.
Under the terms of the agreement, MGM Resorts will retain The
Mirage name and brand, licensing it to Hard Rock royalty-free for a
maximum period of three years while it finalizes its plans to
rebrand the property.
The transaction is expected to close in the second half of 2022,
subject to regulatory approvals and other customary closing
conditions.
BofA Securities and PJT Partners served as financial advisors
and Weil, Gotshal & Manges LLP served as legal counsel to MGM
Resorts.
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
32 unique hotel and gaming destinations globally, including some of
the most recognizable resort brands in the industry. The Company's
50/50 venture, BetMGM, LLC, offers U.S. sports betting and online
gaming through market-leading brands, including BetMGM and
partypoker. The Company is currently pursuing targeted expansion in
Asia through the integrated resort
opportunity in Japan. Through its
"Focused on What Matters: Embracing Humanity and Protecting the
Planet" philosophy, MGM Resorts commits to creating a more
sustainable future, while striving to make a bigger difference in
the lives of its employees, guests, and in the communities where it
operates. The 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, please visit us at
www.mgmresorts.com. Please also connect with us @MGMResortsIntl on
Twitter as well as Facebook and Instagram.
Forward-Looking Statements
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, as amended, and involve risks and/or uncertainties,
including those described in the Company's public filings with the
Securities and Exchange Commission. Forward-looking statements can
be identified by the use of forward-looking terminology such as
"believes," "expects," "could," "may," "will," "should," "seeks,"
"likely," "intends," "plans," "pro forma," "projects," "estimates"
or "anticipates" or the negative of these words and phrases or
similar words or phrases that are predictions of or indicate future
events or trends and that do not relate solely to historical
matters. 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 expectations regarding the closing of the
sale and any benefits expected to be received from the sale,
including the Company's expected net cash proceeds. Forward-looking
statements depend on assumptions, data or methods that may be
incorrect or imprecise, and the Company may not be able to realize
them. The Company does not guarantee that the transaction or other
events described herein will happen as described (or that they will
happen at all). 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 risks related to the
Company's ability to complete the transaction on the terms
described herein or all, the satisfaction of the closing
conditions, including the receipt of regulatory approvals, to which
the completion of the transaction is subject, which could delay or
prevent the completion of the transaction, the continued impact of
the COVID-19 pandemic on the Company's business, the effects of
economic conditions and market conditions in the markets in which
the Company operates and 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 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.
Non-GAAP Financial Measures
This presentation includes
Adjusted Property EBITDAR for The Mirage, which is a "non-GAAP
financial measure" as defined in Regulation G under the Securities
Exchange Act of 1934, as amended. Schedules that reconcile the
non-GAAP financial measure to the most directly comparable
financial measure calculated and presented in accordance with
Generally Accepted Accounting Principles in the United States are available in the
Company's earnings release, dated February
12, 2020, that was furnished with the SEC and is available
on our website at www.mgmresorts.com.
CONTACTS:
News Media
BRIAN AHERN
Executive Director of Corporate Media
Relations
media@mgmresorts.com
Investment Community
CATHERINE PARK
Executive Director of Investor
Relations
cpark@mgmresorts.com
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SOURCE MGM Resorts International