Gambling operator MGM Resorts International announced on Tuesday that it would sell two Reno-based hotel and casino properties to Eldorado Resorts. The latter gaming company is to purchase a 50% share in the so-called Silver Legacy Resort and the entire Circus Circus Reno Hotel & Casino.
As the two operators wrote in a joint statement, Eldorado Resorts would pay $72.5 million in cash and an additional $60-million outstanding under a credit facility of Silver Legacy. In fact, the gaming company already holds a 50% stake in the hotel and casino resort.
Eldorado Resorts is planning to finance its latest purchase with cash on hand and future financing and capital market transactions. Once the acquisition deal is completed, the company would be in charge of a total of 7 facilities in 5 different states (Louisiana, Nevada, Ohio, Pennsylvania, and West Virginia).
Gary Carano, Chief Executive Officer of Eldorado Resorts, said in the Tuesday statement that the purchase of those two properties gives his company the opportunity to further grow and expand its operations. Mr. Carano also pointed out that the transaction is consistent with Eldorado Resorts’ “strategy to enhance shareholder value” by means of economically and strategically attractive new acquisitions.
The executive added that once the deal is completed, his company would own three properties in Reno at a time when the city’s casino industry is recovering and attracting new investors.
This will be the third time in the past several months that MGM Resorts has decided to sell casino properties, acquired when its predecessor MGM Mirage purchased the Mandalay Resort Group back in 2005. The other two casino facilities are Gold Strike Hotel & Gambling in Jean, Nevada and Railroad Pass in Henderson, Nevada.
Dan D’Arrigo, Executive Vice President of MGM Resorts, commented that they are pleased with the transaction, as Eldorado Resorts shares the same core values with his own company.
Despite selling properties in Nevada, MGM Resorts is to expand its operations in Massachusetts and Maryland. The major gambling operator is currently building an $800-million integrated casino resort in Springfield, Massachusetts and a $1.3-billion one in National Harbor, Maryland. The first project is to be completed in 2018 and the latter in 2016.
The deal between MGM Resorts and Eldorado Resorts needs regulatory approval. It is to be closed by the end of this calendar year.
