by Donald Wood
Last updated: 9:34 AM ET, Wed October 16, 2019
MGM Resorts International announced Tuesday it had reached an agreement to sell Circus Circus Las Vegas for $825 million to an affiliate of Treasure Island owner Phil Ruffin.
The deal includes $662.5 million paid in cash and a $162.5 million note due 2024. The transaction is expected to close in the fourth quarter of 2019.
MGM Resorts originally acquired Circus Circus Las Vegas in 2005 and the property features 2,300 employees, a five-acre Adventuredome indoor amusement park, a 10-acre RV park and a 37-acre festival grounds.
"MGM Resorts has engaged in an exhaustive process to evaluate its owned real estate and remains committed to executing its asset-light strategy in a measured way that maximizes value for its shareholders," MGM Resorts CEO Jim Murren said in a statement. "The company expects to utilize the proceeds from this transaction to enhance its capital allocation strategy and complement its strategic and operational flexibility."
"Circus Circus has anchored the north end of the Las Vegas Strip for over 50 years, and I am excited to add it to my casino portfolio," Ruffin said. "I have tremendous respect for Jim Murren and the MGM team, and my relationship with them goes back to my friendship with Kirk Kerkorian and continues to this day."
In another deal announced Tuesday, MGM Resorts revealed an agreement with Blackstone Real Estate Income Trust that values the real estate of Bellagio at $4.25 billion, which represents a purchase price multiple of 17.3 times rent.
The joint venture will acquire the Bellagio real estate and lease it back to a subsidiary of MGM Resorts for an initial annual rent of $245 million. MGM Resorts will receive a five percent equity interest in the joint venture and cash of approximately $4.2 billion.
The transaction is also expected to close in the fourth quarter of 2019.
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