Tuesday, July 7, 2015—MGM Resorts International and Eldorado Resorts announced their plans to shift ownership of two Reno, Nevada casinos. Eldorado Resorts already has 50% ownership of Silver Legacy, but will acquire the other 50% from MGM. Eldorado Resorts will also buyout MGMs full stake in Circus Circus Reno. The payment arrangements include $72.5 million in cash and $60 million to pay off the Silver Legacy Credit Facility. The sale is incumbent upon regulatory approval, which is expected towards the end of the year.
Eldorado Resorts stated they would use cash on hand as well as “future capital market or financing transactions,” according to the public statement release.
After the transaction is complete, Eldorado will gain seven total properties located in five markets across the US. They currently operate casinos in Reno, West Virginia, Louisiana, Ohio, and Pennsylvania.
Gary Carano, CEO for Eldorado, stated, “The acquisition of these well-established properties represents a significant growth and expansion opportunity for Eldorado and is consistent with our strategy to enhance shareholder value by structuring transactions that are strategically and economically attractive.”
In the first six months of 2015, MGM has already sold properties they acquired when it was still MGM Mirage. The resorts were part of the Mandalay Resort Group acquisition from 2005. They sold Railroad Pass located in Henderson and Gold Strike in Jean.
Dan D’Arrigo, VP for MGM, CEO and treasurer said the company has enjoyed a long-term relationship with Eldorado Resorts who “share many of the same core values as MGM.”
Carano stated they are going to own three of the leading Reno casino resorts, which will help “long-term economic support.” Eldorado Resorts merged with MTR Gaming Group last year, which is also part of their long-term goals to expand their brand.
MGM is looking to expand their company just not in Nevada. They are building resorts in Macau, Maryland, and Massachusetts.