MGM In Early Talks to Sell Mirage Operating Rights, Suitor List Likely Long

MGM Resorts International (NYSE:MGM) confirmed on its third-quarter earnings group discussion call in Wednesday that it commenced the sale appendage for the Mirage on the Las Vegas Strip, bringing an terminal to long-running venture about the fate of the structured resort.

The divestment marks the destruction of an geological era for MGM’s connexion with the property, which Steve Wynn opened inward 1989. In 2000, the manipulator previously known as MGM Grand doled out $4.4 1000000000 to gain the companionship then known as Mirage Resorts. The Bellagio, Treasure Island, a 50 percent post in the Monte Carlo and other NV gaming venues as well as casinos inwards Australia, Motown and Mississippi were also included inwards that deal.

On a group discussion phone call with analysts, MGM CEO Bill Hornbuckle, who started his career at the Mirage inwards 1989, said the largest manipulator on the Strip is in the “early stages” of the sales agreement process.

Today we are announcing that, after heedful consideration, we feature made the determination to sell the operations of The Mirage to another operator, a run that we believe is best for the long-term success of both the holding and MGM Resorts,” said Hornbuckle inward a letter to Mirage staffers.

Mirage’s existent demesne is owned past MGM Growth Properties (NYSE:MGP), the gaming real estate investiture trustingness (REIT) spun-off by MGM in 2016. VICI Properties is in the operation of acquiring MGP for $17.2 1000000000000 in equity.

Strip Asset Sales Still Hot

Since late 2019, the stride of prop sales on the Strip has been spicy yet with a gaolbreak caused past the coronavirus pandemic.

MGM has been at the forefront of many of those transactions as both buyer and seller. In September, the soon-to-be former Mirage manipulator shelled out $1.6 billion to gain Cosmopolitan’s operating rights from Blackstone (NYSE:BX). That deal was announced after MGM sold Aria and Vdara to the private equity behemoth inwards a sale-leaseback transaction.

In belatedly 2019, MGM sold the holding assets of Bellagio to Blackstone and genus Circus Circus to Treasure Island possessor Bruce Ruffin. Early the followers year, the casino giant sold the existent landed estate of MGM Grand and Mandalay Bay to MGP and Blackstone Real Estate Income Trust (BREIT) for $4.6 one thousand million inward another sale-leaseback transaction.

News of MGM’s architectural plan to sell the Mirage comes a mean solar day after competitor Caesars Entertainment (NASDAQ:CZR) said it’s eyeing divestment of one of its Strip assets inward betimes 2022. Caesars executives didn’t particularize which of its venues it will put on the auction block.

MGM didn’t say what the asking price is for Mirage’s operating, but on the conference call, an analyst said the cut-rate sale could generate $500 zillion to $600 million inward proceeds for the seller. That’s far less than what it paid for Cosmopolitan’s rights and intimately below the $2.25 1000000000000 Apollo Global Management is paying for the rights to Venetian and Sands Expo & Convention Center.

No Specific Suitor Talk…Yet

MGM also didn’t notice on potential suitors, but due to the perceived rarity of Strip properties coming to marketplace and the allure of beingness inwards the largest domesticated gaming mecca, the heel of potential buyers is potential to live long.

There was recent verbalise Ruffin could wee-wee a feed at Mirage due to the attribute existence connected past tram to his Treasure Island, but that maunder died down. Golden Nugget brag Tilman Fertitta has long in demand(p) a Strip asset. His companionship is currently workings through and through a business deal with blank-check firmly to again turn a publically traded entity.

Tribal gaming heavyweight Hard John Rock International has also been mentioned online as a possible Mirage suitor. That’s not a far-fetched scenario as tribal operators are upping their Las Vegas footprints, but Hard Rock has lots of irons inwards the fire, including pitches for a Windy City gaming locus and pursuance of securities industry ledger entry in New York City and northern New Jersey.