U.S. casino operator MGM Resorts International says that the $2.5 billion sale of MGM Grand Hotel will be used to secure capital, in order to pursue growth opportunities, including its IR ambitions in Japan and sports betting.
Combined with an earlier completed sale of the Bellagio and Circus Circus properties, MGM Resorts expects the transactions to net cash proceeds of $8.2 billion.
“The transactions, as part of our broader asset-light strategy, will uniquely position MGM Resorts as a leader within the global gaming, hospitality and entertainment sector as a significant return of capital story, while also enabling it to achieve a fortress balance sheet.”
Jim Murren, chairman and chief executive officer of MGM Resorts said the announcements represent a key milestone in executing the Company’s previously communicated asset-light strategy.
“Our corporate objective remains crystal clear, we will continue to monetize our owned real estate assets, which facilitates our strong focus on returning capital to our shareholders, while also retaining significant flexibility to pursue our visible growth initiatives, including Japan and sports betting.”
MGM Grand’s real estate is set to be acquired by a joint venture of MGM Growth Properties and Blackstone Real Estate Income Trust, which will in turn, lease the properties back to MGM Resorts for an initial rent of $292 million.
The transaction is expected to close in the first quarter of 2020, subject to certain closing conditions.