FILE PHOTO: People watch the dancing water fountain synchronised to music at the Bellagio Luxury Resort and Casino on the Las Vegas Strip in Las Vegas, Nevada, U.S. February 26, 2018. REUTERS/Darrin Zammit Lupi
(Reuters) – MGM Resorts International (MGM.N) said on Tuesday it would sell its Bellagio and Circus Circus resorts in Las Vegas in separate deals valued at about $5 billion, as the casino operator adopts an asset-light strategy to bolster its balance sheet.
Blackstone Real Estate Income Trust will acquire the Bellagio from MGM for $4.25 billion in a sale-leaseback transaction through a 95-5 joint venture with MGM, the companies said in a statement.
MGM also said it would sell Circus Circus Las Vegas to an affiliate of Treasure Island owner Phil Ruffin for $825 million.
MGM Chief Executive Officer Jim Murren said the company would use the proceeds from both the deals to “build a fortress balance sheet” and return capital to shareholders.
Both the deals are expected to close in the fourth quarter of 2019.
In January, MGM announced plans to cut costs and boost growth, proposing to increase annualized adjusted earnings before interest, taxes, depreciation and amortization by $300 million by the end of 2021. (reut.rs/33A19ng)
Reporting by Sanjana Shivdas in Bengaluru; Editing by Maju Samuel