MGM plans to sell Mirage operations in Las Vegas
MGM Resorts' portfolio includes the Bellagio, MGM Grand, Aria, and Park MGM
MGM Resorts International said it would sell its operations of The Mirage to another operator, part of a rash of deals that are changing the hands of ownership on the Las Vegas Strip.
MGM Resorts, like other casino and hotel operators, has been shedding some of its assets including its real-estate holdings to focus on new business areas such as sports betting, entertainment and a casino development in Japan.
"We are committed to continuing to maintain and develop our existing Las Vegas portfolio with no plans for other changes on the Strip at this time," Chief Executive Bill Hornbuckle said in a letter to employees on Wednesday. Its portfolio also includes the Bellagio, MGM Grand, Aria, and Park MGM.
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The Las Vegas-based company said it hasn’t sold Mirage’s operations yet and didn’t disclose any potential buyers.
MGM Growth Properties LLC, a publicly traded real-estate investment trust that MGM Resorts spun off in 2016 and still controls, owns the underlying real estate of The Mirage. The casino real-estate owner is in the middle of its own transaction—a deal to be acquired by Vici Properties Inc. for around $17.2 billion, including about $5.7 billion in debt. MGM Growth’s properties on the Las Vegas Strip include Mandalay Bay, Luxor, Excalibur and MGM Grand Las Vegas.
MGM Resorts has recently engaged in transactions that allow it to separate the ownership of the property from the hotel and casino operations.
MGM Resorts in September closed a deal to take full ownership of the huge CityCenter property on the Las Vegas Strip in a complex arrangement to sell the real estate, but still gain all the revenue from operating the massive Strip casino.
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In the same month, MGM Resorts agreed to acquire the operations of The Cosmopolitan of Las Vegas from Blackstone for $5.65 billion. A Blackstone REIT will acquire the property.
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MGM Resorts was formally chosen by Osaka to pursue one of Japan’s first casino gambling resorts after being the only company to submit an application to the local government. The $10 billion proposal includes 2,500 hotel rooms, conference and exhibition spaces and a 3,500-seat theater to be built on a man-made island in Osaka Bay. If awarded a license, it plans to open the casino in the latter half of the decade.
On Wednesday, MGM Resorts also reported third-quarter results, swinging to a profit this year compared with last, after revenue bounced back from resumed travel and leisure activities that were stalled last year by the pandemic.
Consolidated net revenue more than doubled from last year to $2.71 billion this quarter. It recorded a net profit of $1.4 billion, compared with a loss of $535 million a year earlier.
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The third quarter of 2020 was heavily affected by the pandemic, with some properties closed and operational restrictions imposed at others, the company said. Revenue in the third quarter of this year benefited from the removal of mandated restrictions and an increase in travel.
Net revenue from the company’s Las Vegas Strip resorts increased 187% to $1.4 billion in the three months through September, while revenue from regional operations jumped 66% to $925 million, the company said.