A big shuffle in Las Vegas has occurred this week through separate deals made by estimated to be worth around $5 billion.
The US entertainment and hospitality company MGM Resorts announced this week that it has unloaded two of its iconic Las Vegas casinos in a bid to reshuffle its finances.
In a statement made on Tuesday, MGM Resorts revealed that it has successfully sold its popular Circus Circus hotel and casino on the Las Vegas Strip to its rival resort owner Phil Ruffin.
The new owner of the Circus Circus Las Vegas is a billionaire businessman who also owns and operates the Treasure Island Hotel and Casino also located on the Strip.
MGM sold the hotel and casino for $825 million. The deal is expected to close at the end of the year. However, it will still be subject to regulatory approvals before it can be closed.
The Circus Circus Las Vegas, which was established in 1968, is one of the most iconic establishments on the Strip. The casino has an overall carnival theme with various amusement parks, sports betting facilities, ballrooms, and most recently Las Vegas' newest water park. The hotel's popular clown marquee has appeared in various media in pop culture, including a feature in the 1971 James Bond film, "Diamonds Are Forever."
In a separate deal, MGM had agreed to form a new joint venture company with private equity firm Blackstone to acquire property from its own brand Bellagio.
Under the deal, Blackstone will be taking control of Bellagio's properties, including the lot sitting in the middle of the Las Vegas Strip, which is famous for its dancing fountains. MGM will retain a 5 percent stake in Bellagio and it has agreed to pay $245 million as annual rent for its hotel to continue to operate.
MGM Resorts CEO Jim Murren mentioned that the company will be using the proceeds of its Circus Circus sale and Blackstone deal to shore up its balance sheets.
The company also plans to return some capital to its shareholders in the coming months and use part of the funds as a buffer to weather the global economic slowdown.
However, a big portion of the proceeds will be used to fund the company's international expansion. MGM is currently investing billions of dollars to establish a new casino and resort in Japan. The company is also planning to expand its sports betting business in the United States.
MGM's unloading of part of its assets is the second-biggest real estate deal in Las Vegas this year. Back in June, Eldorado Resorts acquires Caesars for $17.3 billion. The merger resulted in the establishment of the biggest gaming company in the United States.
