Thursday, October 31, 2019

“MGM Sets Year-End Target for Sale of MGM Grand in Las Vegas - Bloomberg” plus 3 more

“MGM Sets Year-End Target for Sale of MGM Grand in Las Vegas - Bloomberg” plus 3 more


MGM Sets Year-End Target for Sale of MGM Grand in Las Vegas - Bloomberg

Posted: 30 Oct 2019 02:06 PM PDT

MGM to announce buyer of MGM Grand in Las Vegas by the end of the year - Yogonet International

Posted: 31 Oct 2019 07:43 AM PDT

CEO Jim Murren said the sale should result in higher free cash flow per share and a more flexible financial structure that allows MGM to better capitalize on its strengths as a casino developer and manager.

In a conference call Wednesday, Chief Executive Officer Jim Murren said MGM Resorts International plans to use the proceeds from the MGM Grand sale to reduce debt and invest in new growth opportunities, including a potential $10 billion casino in Japan and sports betting in the U.S.

This marks one of the final steps toward the MGM's goal of becoming an "asset-light" casino operator. The company agreed this month to sell the Bellagio resort in Las Vegas to Blackstone Group in a $4.25 billion deal under which MGM will continue to manage the property. MGM is also selling its Circus Circus casino in the city to real estate mogul Phil Ruffin.

MGM Resorts is continuing to evaluate the sale of its remaining real estate assets, Bloomberg reports, -- including CityCenter, a joint venture with Dubai World that owns the Aria resort in Las Vegas. The company also plans to reduce its majority stake in MGM Growth Properties, a real estate investment trust, Murren said.

A half-dozen large real estate investors considered buying the Bellagio before Blackstone won out, according to Murren. He said the company is committed to reducing its stake in MGM Growth Properties to under 50% or less. The REIT could be a buyer of the MGM Grand.

"If it came down to a transaction between a third party and MGP, we're always going to favor MGP in a close race," Murren said.

The company has been under pressure from activist investors to boost its stock price over the past few years. Murren has taken steps to do so, including two rounds of company-wide cost-cutting.

In 2016, the company put the bulk of its properties into MGM Growth. That entity also has an option to purchase a Massachusetts casino, the MGM Springfield, which will become the company's last wholly-owned casino in the U.S. once the MGM Grand sale is completed.

Separately, MGM reported third-quarter sales that fell short of analysts' estimates as a result of fewer Asian visitors playing baccarat in Las Vegas. Profit beat expectations on the acquisition of new regional casinos and the addition of new high-roller suites in Macau.

The shares were up 1.3% to $29 in extended trading. The stock initially fell but recovered after the MGM Grand sale plan was announced.

Murren reiterated his target of as much as $3.9 billion in earnings before interest, taxes, depreciation, and amortization next year.

MGM to sell Bellagio, Circus Circus in Vegas - Finance and Commerce

Posted: 16 Oct 2019 12:00 AM PDT

MGM Resorts International, pressured by investors to unload its remaining company-owned casinos, agreed to sell the Bellagio resort in Las Vegas to Blackstone Group for $4.25 billion and will continue to operate the property under a lease arrangement.

The Las Vegas-based casino company also agreed to sell the Circus Circus property on the Strip, along with 47 adjoining acres, to real estate mogul Phil Ruffin for $825 million, according to a statement Tuesday.

With the sales, MGM Resorts moves a step closer to becoming a landless casino company, marking a new era for the largest operator of casinos on the Las Vegas Strip. When all of its deals close, the company will have just two wholly owned properties, including the flagship MGM Grand, remaining under its ownership. The company is keeping a 5% stake in the Blackstone-led venture that's buying Bellagio.

"The casino industry is evolving and we figured the best use of our intellectual capital was to focus on sports, live entertainment and reduce leverage," Jim Murren, MGM's chairman and chief executive officer, said in an interview. "It's very historic for a variety of reasons."

MGM has been restructuring under pressure from activist investors. The company has cut and reorganized management, and previously sold all but four of its wholly owned casinos to MGM Growth Properties Inc., a real estate investment trust it created three years ago. The REIT has an option to buy the MGM Springfield in Massachusetts.

The price for Bellagio represents 17.3 times the initial annual rent of $245 million, MGM said. Bloomberg News previously reported Blackstone was in talks to buy and lease back the Bellagio and MGM Grand. The property is being purchased by the Blackstone Real Estate Investment Trust.

MGM will use the proceeds to bolster its balance sheet and return capital to shareholders. Murren said the transactions will help the company target new growth opportunities, including one of the new integrated resource licenses in Japan and sports betting in the U.S. MGM has no plans to develop any more casinos in Las Vegas, he said.

Earlier deals

Ruffin, a real estate mogul raised in Wichita, Kansas, will pay $662.5 million in cash for Circus Circus. The $162.5 million balance will be in a note that's due in 2024. The parties expected to deal to close in the fourth quarter. The resort has 2,300 employees and includes a 20-acre RV park and 37-acre festival grounds.

Ruffin bought the Treasure Island casino from MGM for $746 million in 2009. The company then was trying to raise cash following the financial crisis and complete construction of its CityCenter project.

He fixed up Treasure Island, once known for its daily pirate battles outside, adding a western-themed barbecue restaurant and other amenities aimed at Middle American guests. Earlier, he partnered with Donald Trump on the Trump International Hotel, a non-casino hotel and condo development on the Strip.

Circus Circus, now more than 50 years old, was once a flagship property of publicly traded Circus Circus Enterprises. MGM ultimately acquired that company. The resort itself is located at the less-trafficked north end of the Strip.

The sale of Bellagio will provide a benchmark value to attract bidders for MGM's remaining real estate interests, Murren said, including the CityCenter properties that are co-owned with Dubai World, and the flagship MGM Grand.

Murren also said he wasn't concerned that Penn National Gaming Corp., another casino operator that had moved to a similar asset-light strategy, trades at a lower multiple of earnings than other casino companies. He said MGM's assets make it unique.

MGM Resorts enlisted Weil, Gotshal & Manges as its legal counsel, while PJT Partners and JPMorgan Chase & Co. served as financial advisers. Blackstone's REIT used Citigroup Inc. and Morgan Stanley as its financial advisers. Simpson Thacher & Bartlett LLP, meanwhile, was its legal counsel.

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MGM China Reports 2019 Third Quarter Financial Data - PRNewswire

Posted: 30 Oct 2019 03:17 PM PDT

HONG KONG, Oct. 30, 2019 /PRNewswire/ -- MGM China Holdings Limited ("MGM China" or the "Company"; SEHK Stock Code: 2282) today announced the selected unaudited financial data of the Company and its subsidiaries (the "Group") for the three months and nine months ended September 30, 2019.

  • During the third quarter, MGM China saw adjusted EBITDA up 39% year-on-year to approximately HK$1.5 billion. Total revenue grew by 22% year-on-year to approximately HK$5.8 billion. While MGM COTAI continues to ramp and improve efficiency, adjusted EBITDA margin improved to 26.8% from 23.5% a year ago.
  • Overall occupancy reached 93.7% (2018: 92.0%).
  • While Macau market saw third-quarter gross gaming revenue (GGR) down by 4% year-on-year, MGM China's GGR was up by 25% from a year ago. MGM China gained market share to approximately 9.9% in the third quarter from 7.9% last year.
  • For the period, main floor table games win for the Group increased 47% year-on-year to approximately HK$3.9 billion. Slot win was up 3% to approximately HK$572 million. VIP table games win was up 4% to approximately HK$2.5 billion.
  • MGM China sees approximately 86% of profit from non-VIP businesses for the period.
  • MGM COTAI continues to grow since the property opened in February 2018. It recorded growth across all business segments. Adjusted EBITDA was up 433% to HK$693 million from a year ago. Main floor table games win was up 84% year-on-year to approximately HK$1.9 billion. Slot win was up 56% to HK$276 million. VIP table games win was up 1723% to approximately HK$1.2 billion.
  • All villas at The Mansion were opened before October Golden Week and have been receiving highly positive feedbacks. Our unique high-end offerings and our premium services boosted player retention and new player acquisition.
  • MGM COTAI has currently more authentic dining options directly on the gaming floor. They are well received by the players with prolonged gaming hours on the gaming floor.
  • Meanwhile, MGM MACAU recorded adjusted EBITDA of approximately of HK$856 million (2018: HK$987 million) for the period. Main floor table games win up 22% to approximately HK$2.0 billion (2018: HK$1.6 billion). Slot win was approximately HK$297 million (2018: HK$380 million). VIP table games win was down by 44% to approximately HK$1.3 billion amid headwinds and uncertainties in the market.

Grant Bowie, Chief Executive Officer and Executive Director of MGM China said: "We are encouraged to see profit at MGM COTAI reaching new high. MGM COTAI continues to ramp with solid sequential growth amid market uncertainties.

"We embrace the growth opportunities in the market especially in the mass segment. We constantly evaluate our strategies, gaming as well as non-gaming offerings to offer unique MGM experiences, supporting our government's vision to develop Macau as the World Center of Tourism and Leisure."

About MGM China Holdings Limited

MGM China Holdings Limited (HKEx: 2282) is a leading developer, owner and operator of gaming and lodging resorts in the Greater China region. We are the holding company of MGM Grand Paradise, SA which holds one of the six gaming concessions/subconcessions to run casino games in Macau. MGM Grand Paradise, SA owns and operates MGM MACAU, the award-winning premium integrated resort located on the Macau Peninsula and MGM COTAI, a contemporary luxury integrated resort in Cotai, which opened in early 2018 and more than doubles our presence in Macau. 

MGM China is majority owned by MGM Resorts International (NYSE: MGM) one of the world's leading global hospitality companies, operating a portfolio of destination resort brands including Bellagio, MGM Grand, Mandalay Bay and The Mirage. For more information about MGM Resorts International, visit the Company's website at www.mgmresorts.com.

SOURCE MGM China

Related Links

http://www.mgmresorts.com

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