LAS VEGAS, Sept. 5, 2017 /PRNewswire/ -- MGM Resorts
International ("MGM Resorts") (NYSE: MGM) and MGM Growth Properties
LLC ("MGP") (NYSE: MGP) announced today that they have entered into
a definitive agreement whereby a subsidiary of MGP will purchase
the long-term leasehold interest and real property improvements
associated with the MGM National Harbor casino resort. MGM Resorts
will lease the property from MGP and continue to operate the
property following the consummation of the transaction, with no
expected change to its employees, vendors, customers, and the
community.
MGP will pay total consideration of approximately $1.1875 billion, consisting of a combination of
$462.5 million in cash (which may
include cash on hand or cash from financings, including borrowings
under MGP's revolving credit facility), the assumption of
approximately $425 million of secured
indebtedness of MGM National Harbor, LLC (which is expected to be
immediately repaid by MGP on the closing date) and the issuance by
MGM Growth Properties Operating Partnership LP, a subsidiary of
MGP, of operating partnership units representing $300 million of value based upon the closing
price of MGP's Class A shares on September
5, 2017. MGM National Harbor will be added to the existing
Master Lease between MGM Resorts and MGP, and the rent payment to
MGP will increase by $95 million. Consistent with the Master
Lease terms, 90 percent of this rent will be fixed and
contractually grow at 2 percent per year until 2022. The sale
is expected to close in the fourth quarter of 2017, subject to
regulatory approvals and other customary closing conditions.
"We are excited to welcome MGM National Harbor to our portfolio
and expand our geographic presence on the East Coast," said
James Stewart, CEO of MGP. "As a
result of this transaction, we expect to achieve mid-single digit
percentage accretion to AFFO per share, while maintaining our
balance sheet flexibility. Since MGP's IPO last year, we have
worked diligently to increase value for our shareholders and we
remain focused on continuing to drive prudent growth through future
transactions."
"We are pleased to announce another accretive transaction with
MGM Growth Properties, which we believe serves the best interests
of the shareholders of both companies and again demonstrates our
team's ability to deliver on our long-term plan," said Jim Murren, Chairman and CEO of MGM Resorts.
"MGM National Harbor has exhibited strong financial performance and
has already secured its place as the leading resort in its market.
We will continue to support MGP as it drives future growth through
the expansion of its quality asset portfolio."
As of September 5, 2017, MGM
Resorts held a 76 percent economic interest in the operating
partnership of MGP.
About MGM Resorts International
MGM Resorts International (NYSE: MGM) is an S&P 500® global
entertainment company with national and international locations
featuring best-in-class hotels and casinos, state-of-the-art
meetings and conference spaces, incredible live and theatrical
entertainment experiences, and an extensive array of restaurant,
nightlife and retail offerings. MGM Resorts creates immersive,
iconic experiences through its suite of Las Vegas-inspired brands. The MGM Resorts
portfolio encompasses 27 unique hotel offerings including some of
the most recognizable resort brands in the industry. The company is
expanding throughout the U.S. and around the world, developing MGM
Springfield in Massachusetts and
MGM COTAI in Macau, and debuting
the first international Bellagio branded hotel in Shanghai. The 77,000 global employees of MGM
Resorts are proud of their company for being recognized as one of
FORTUNE® Magazine's World's Most Admired Companies®. For more
information visit us at www.mgmresorts.com.
About MGM Growth Properties
MGM Growth Properties LLC (NYSE:MGP) is one of the leading
publicly traded real estate investment trusts engaged in the
acquisition, ownership and leasing of large-scale destination
entertainment and leisure resorts, whose diverse amenities include
casino gaming, hotel, convention, dining, entertainment and retail
offerings. MGP currently owns a portfolio of properties acquired
from MGM Resorts, consisting of ten premier destination resorts in
Las Vegas and elsewhere across
the United States and one dining
and entertainment complex which opened in April 2016. As of December
31, 2016, these properties collectively comprise 27,233
hotel rooms, over 2.6 million convention square footage, over 100
retail outlets, over 200 food and beverage outlets and over 20
entertainment venues. As a growth-oriented public real estate
entity, MGP expects its relationship with MGM Resorts and other
entertainment providers to attractively position MGP for the
acquisition of additional properties across the entertainment,
hospitality and leisure industries that MGM Resorts or other
entertainment providers may develop in the future. For more
information about MGP, visit the Company's website at
http://www.mgmgrowthproperties.com.
Forward-Looking Statements
Statements in this release that are not historical facts are
"forward-looking" statements and "safe harbor statements" within
the meaning of the Private Securities Litigation Reform Act of 1995
that involve risks and/or uncertainties, including those described
in each of MGM Resorts' and MGP's public filings with the
Securities and Exchange Commission. Management of MGM Resorts and
MGP have based forward-looking statements on their current
expectations and assumptions and not on historical facts. Examples
of these statements include, but are not limited to, the closing of
the sale and any expected benefits to be realized as a result of
the transaction (including any expected accretion to AFFO). These
forward-looking statements involve a number of risks and
uncertainties. Among the important factors that could cause actual
results to differ materially from those indicated in such
forward-looking statements include effects of economic conditions
and market conditions in the markets in which the companies operate
and competition with other destination travel locations throughout
the United States and the world,
the design, timing and costs of expansion projects, risks relating
to international operations, permits, licenses, financings,
approvals and other contingencies in connection with growth in new
or existing jurisdictions, delays or impediments to completing
planned acquisitions or projects, the ultimate timing and outcome
of any planned acquisitions or projects, MGP's ability to maintain
its status as a REIT and additional risks and uncertainties
described in each of MGM Resorts' and MGP's periodic reports filed
with the Securities and Exchange Commission (including all
amendments to those reports). In providing forward-looking
statements, neither company is undertaking any duty or obligation
to update these statements publicly as a result of new information,
future events or otherwise, except as required by law. If either
company updates one or more forward-looking statements, no
inference should be drawn that it will make additional updates with
respect to those other forward-looking statements.
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SOURCE MGM Growth Properties LLC; MGM Resorts International