MGM Resorts International has entered into a definitive agreement to sell Circus Circus Las Vegas for $825m to an affiliate of casino mogul and Treasure Island owner Phil Ruffin.
For the 12 months ending June 30, 2019, the property reported adjusted property EBITDA of $62m.
"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 maximises value for its shareholders," said Jim Murren, chairman and CEO of MGM Resorts. "The company expects to utilise the proceeds from this transaction to enhance its capital allocation strategy and complement its strategic and operational flexibility."
Ruffin said: "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. 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."
The $825m purchase price will comprise $662.5m paid in cash and a $162.5m note due in 2024.
The transaction is expected to close in the fourth quarter of 2019, subject to customary closing conditions, including receipt of necessary regulatory approvals. The company expects to record a third quarter impairment charge of approximately $220m in connection with this transaction.
