LAS VEGAS—MGM Resorts International has closed on the sale of the operations of The Mirage Hotel & Casino to Hard Rock International for $1.075 billion in cash.
“Mirage employees have delivered unparalleled service and experiences over the past three decades, and we are forever thankful for their work to make The Mirage such an iconic, world-class destination,” said Bill Hornbuckle, CEO and president, MGM Resorts International. “I’m excited for the opportunities that lay ahead for the property, its people, and the entire Las Vegas Strip with this prime location now under Hard Rock’s leadership. We’re thrilled to welcome Hard Rock to the neighborhood and wish them all the very best.”
“The closing of this transaction represents another important step in the pursuit of our long-term strategic objectives,” said Jonathan Halkyard, CFO and treasurer, MGM Resorts International. “We plan to use the proceeds from this transaction to further advance our capital allocation strategy which includes maintaining a strong balance sheet, pursuing targeted growth opportunities, and returning cash to our shareholders.”
For the twelve months that ended December 31, 2019, The Mirage reported adjusted property EBITDAR of $154 million. At the closing of the transaction, MGM Resorts master lease, which currently includes The Mirage property, will be amended to reduce the annual rent by $90 million. The company expects net cash proceeds after taxes and estimated fees to be approximately $815 million.
VICI, as the real estate owner of The Mirage, will enter into a new lease agreement with Hard Rock. Under the terms of the agreement, MGM Resorts will retain The Mirage name and brand, licensing it to Hard Rock royalty-free for a maximum period of three years while it finalizes its plans to rebrand the property.
BofA Securities and PJT Partners served as financial advisors and Weil, Gotshal & Manges LLP served as legal counsel to MGM Resorts.