American casino operator, MGM Resorts International, is reportedly in advanced talks to offload its family-friendly Circus Circus Las Vegas property to an entity controlled by the man behind the nearby Treasure Island Las Vegas venue.
According to a Monday report from the Las Vegas Review-Journal newspaper, the Las Vegas-headquartered firm reached a handshake agreement regarding the 3,767-room development with billionaire businessman, Phil Ruffin, on September 12 and immediately ceased similar negotiations it had been holding with other unnamed parties.
The newspaper reported that 84-year-old Ruffin spent some $775 million in 2008 to purchase the Treasure Island Las Vegas property from the same firm and is also known to hold a significant stake in the 64-story Trump International Hotel Las Vegas luxury hotel. It detailed that the Texas native now looks set to pay approximately $1 billion to take control of the similarly-impressive Circus Circus Las Vegas venue as well as MGM Resorts International’s parcel within the Las Vegas Festival Grounds along the extreme northern end of the Las Vegas Strip.
For its part, MGM Resorts International established a special independent committee in January that has been tasked with evaluating ways for the firm to extract further value from its real estate portfolio and it is additionally said to be mulling over a $7 billion lease-back deal for its MGM Grand and Bellagio Las Vegas properties. This autonomous body is set to publish the findings of its investigation in the autumn following a move by activist hedge fund Starboard Value to build up a significant position in the casino firm.
Opened in October of 1968, the Circus Circus development is one of the most profitable in southern Nevada and reportedly posted net second-quarter revenues of around $65.9 million with its cash flow reaching about $17.7 million. The Las Vegas Journal-Review explained that the circus-themed venue additionally saw its occupancy rate for the same three-month period rise by 2% year-on-year to hit 87% as the average cost of its rooms grew by over 8% to approximately $88.