The NYSE-listed Standard and Poor’s 500 international entertainment company has inked the transaction for $450 million in cash received from the Cherokee Nation Businesses’ subsidiary. The company with an impressive portfolio consisting of 31 global hotel and gaming destinations used Weil, Gotshal & Manges LLP as a legal counsel to complete the sale.
MGM Resorts, Ready to Grow
MGM Resorts International’s president and chief executive officer Bill Hornbuckle called Gold Strike Hotel & Casino in Tunica “an iconic property in Mississippi,” with employees representative of southern hospitality at its finest. Hornbuckle also wished Gold Strike a bright and lucrative future ahead while speaking about their plans for the new proceeds.
As explained by the treasurer and chief financial officer Jonathan Halkyard, MGM Resorts plans to use the money to strengthen its balance sheet, use more capital to enjoy more growth and return more capital to its shareholders.
At the closing time of the transaction, the company’s master lease with VICI Properties, Inc., which also comprises Gold Strike, will be changed to cut the annual rent by $40 million. This will be done in order to account for the fresh sale of the Gold Strike operations. MGM Resorts anticipates obtaining net cash proceeds after taxes and fees estimated to be $350 million.
Cherokee Nation Entertainment to Own 11 Casinos
As a result of the newly sealed deal, Cherokee Nation Entertainment will operate and own 11 casinos. The list includes the Hard Rock Hotel & Casino Tulsa, three resort hotels, three golf courses, a horse-racing track, and a series of additional retail operations.
For the year ended December 31, 2022, the Gold Strike property recorded $47 million in net income and $98 million in Adjusted Property Earnings Before Interest, Taxes, Depreciation, Amortization, and Restructuring or Rent Costs.
Cherokee National plans on further expanding its gaming and hospitality businesses while putting its strategic plans of growth into action. The new acquisition is expected to contribute to the growth of the Cherokee Nation’s economy while also attracting positive changes in the local economies.
MGM Resorts decided to sell the Mississippi property as a means of narrowing its focus in the region to just one resort, Beau Rivage Resort & Casino. The company also decided to dedicate more time and resources to driving the success of this world-class property.
Beau Rivage is a waterfront casino resort located in Biloxi and it is owned by Vici Properties. It provides a full range of hotel, dining, and entertainment services, including non-stop casino options.
In April 2022, MGM Resorts added Aristocrat’s Buffalo Zone game to Beau Rivage casino’s offering.
In December 2022, MGM Resorts International announced it would invest $2 billion in its Chinese subsidiary as a result of the Macau concession’s extension.