LAS VEGAS (KTNV) — A major deal has been reached involving multiple properties on the Las Vegas Strip.
Financial analyst Steve Budin says about five years ago MGM split its company into two, MGM Resorts International, which operates about a half dozen resort-casinos on the Strip, and MGM Growth Properties, which owns the physical buildings and land that houses those resorts.
On Wednesday, MGM Resorts International sold MGM Growth Properties to VICI in a deal worth more than $17 billion. As part of the deal, MGM Resorts International will receive about $4.4 billion.
"In 2016 we started on our journey to become asset light and this announcement, together with our recently announced Springfield and CityCenter transactions, reflects the culmination of those efforts and a major step forward in simplifying our corporate structure," said Bill Hornbuckle, chief executive officer and president of MGM Resorts, in a press release.
"As a result of these actions, we are well positioned and remain focused on pursuing growth opportunities in our core business, with significant financial flexibility to continue to deploy capital to maximize shareholder value."
MGM Growth Properties has a portfolio that includes about a half dozen Strip properties, including MGM Grand, Mandalay Bay, The Mirage, Park MGM, Luxor, New York New York, and Excalibur. It's unclear which properties VICI is acquiring, but according to a press release, the company says this deal "creates America’s largest owner of experiential real estate with an enterprise value of approximately $45 billion."
Budin doesn't expect this deal will mean much for customers and employees who go into these properties.
"The average customer won't notice any difference because the operator is still MGM. So, if you have a player card, if you have reservations, nothing will change. It's still an MGM-run property," he said.
"They just run the casino and they make their rent payments to a new company. If you're an employee in any of these MGM properties, you're not going to notice a change either because MGM is still running the casinos," said Budin.
MGM Resorts will own about a 1% stake in the VICI operating partnership. This deal is expected to be finalized in the first half of 2022.