MGM Resorts International announced Tuesday it plans to sell the MGM Grand and Mandalay Bay properties on the Las Vegas Strip for $2.5 billion.
According to the Wall Street Journal, MGM Growth Properties LLC announced as part of its partnership with private-equity and real estate company Blackstone Group that it would purchase the two properties, with MGM Resorts continuing to operate them for an initial rent of $292 million.
MGM Resorts plans to close the deal by the end of March, subject to certain closing conditions.
“These announcements represent a key milestone in executing the company’s previously communicated asset-light strategy, one that enables a best-in-class balance sheet and strong free cash flow generation to provide MGM Resorts with meaningful strategic flexibility to create continued value for our shareholders,” MGM Resorts CEO Jim Murren said in a statement.
The sale of the MGM Grand and Mandalay Bay come after MGM Resorts announced two blockbusters deals in October.
Not only did the company reach an agreement to sell Circus Circus Las Vegas for $825 million to an affiliate of Treasure Island owner Phil Ruffin, but it also sold the Bellagio for $4.25 billion to Blackstone Real Estate Income Trust.
Combined, the sales of the four properties are “expected to provide total net cash proceeds to MGM Resorts of $8.2 billion.”
“The valuation levels achieved on the Bellagio and MGM Grand Las Vegas transactions are a testament to MGM Resorts as a high-quality tenant and our overall asset quality,” MGM Resorts’ Paul Salem said. “The robust interest in our recent transactions further validates the company’s conviction on being able to unlock value for our shareholders through its asset light strategy.”
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MGM Resorts’ Entertainment Partners Donate to COVID-19 Employee Fund
MGM Resorts International is publicly thanking the many resident entertainment partners who have donated generously to the company’s Employee Emergency Grant Fund in order to counteract the economic impact of the COVID-19 pandemic on its workforce members.
Among the entertainers who have made donations to the MGM Employee Emergency Grant Fund over the past week are David Copperfield, Jay Leno, Bill Maher, Kathleen Madigan, David Spade, Boyz II Men, Brad Garrett, Carrot Top, Terry Fator, Ray Romano, Jabbawockeez, Shin Lim, Thunder from Down Under, Hans Klok, Australian Bee Gees, Fantasy and Bill Blumenreich Presents.
When its properties shuttered in mid-March in response to the COVID-19 pandemic, MGM Resorts said that it planned to pay those full-time employees who were being furloughed or laid off or for two weeks from their last date of work and maintain all health plans through June 30, 2020. Now, Nevada has extended the mandatory closure of all non-essential businesses through April 30.
“We are incredibly humbled by the support of our entertainment partners, who have come together to assist the people who, during normal times, are committed to creating incredible experiences for our guests from around the world,” said Bill Hornbuckle, MGM Resorts’ Acting CEO and President. “During these difficult and uncertain days, weeks and months, we are working tirelessly to support the tens of thousands of employees who were furloughed or laid off due to the closures of our properties across the country,”
On March 23, MGM Resorts International had already announced its own pledge of $1 million to its newly-created MGM Employee Emergency Grant Fund, which is designed to provide short-term financial assistance for MGM employees and their immediate families during emergencies and unexpected hardships.
The Grant Fund may also provide, “disaster relief assistance to furloughed or laid-off employees whose compensation is suspended or employment terminated as a result of an extraordinary event…such as the COVID-19 public health crisis,” MGM said in a statement.
Thank you to all the MGM resident entertainment partners who have so generously donated to the MGM Resorts Foundation Employee Emergency Grant Fund! The show will go on. #onlyvegas #togetherathome https://t.co/tuZESTdw74 pic.twitter.com/V8SuwwlHx8
— MGM Resorts (@MGMResortsIntl) April 8, 2020
On March 26, Award-winning musical artist Bruno Mars, who has performed a series of limited dates at the Park MGM theater, also personally donated $1 million to the MGM Resorts Foundation to aid MGM employees who’re being impacted economically by the coronavirus (COVID-19) pandemic.
A representative for Mars said, “With the closures across Las Vegas, Bruno wanted to show his appreciation to the amazing employees who help make these shows possible in hopes that we’ll all be out of this situation and having fun together again very soon.”
Hornbuckle today announced that, with these donations from its outstanding family of entertainers, plus pledges from MGM Resorts and its leadership team, its own employees and a number of other contributions, the Employee Emergency Grant Fund has already raised approximately $11 million to buoy up its employees during these tumultuous times.
For more information, visit mgmresorts.com.
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