Sunday, April 14, 2024

MGM Resorts Divests Itself of Reno Casino Resort Operations

Reno, NV, USA — Eldorado Resorts, Inc. (“Eldorado,” “ERI,” or “the Company”) and MGM Resorts International (“MGM”) have announced that they have entered into a definitive agreement for Eldorado to acquire MGM’s 50 percent interest in the Silver Legacy Resort Casino Reno, as well as all of the assets of Circus Circus Reno, for total consideration of $72.5 million cash, subject to a working capital adjustment. In addition, ERI expects that it will repay amounts outstanding under the Silver Legacy credit facility, of which approximately $60 million was outstanding at March 31, 2015 on a net debt basis. ERI and its affiliates already own the other 50 percent interest in Silver Legacy. The acquisitions are not subject to a financing condition and the purchase price and repayment of the Silver Legacy credit facility are expected to be funded by Eldorado through cash on hand and future capital market or financing transactions.

Gary Carano, Chairman and Chief Executive Officer of Eldorado, commented, “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. The acquisition is expected to be accretive to our operating results upon closing, builds the critical mass of our gaming operations and fortifies our position in the increasingly attractive Reno gaming market.”

The proposed transaction will increase Eldorado’s property portfolio to seven wholly-owned and operated facilities in five markets with a total of approximately 10,850 slot machines and VLTs, approximately 310 table games, approximately 4,850 hotel rooms, approximately 36 dining options, three pari-mutuel racing facilities and approximately 8,600 team members.

“We greatly appreciate the hard work and dedication of our employees at Circus Circus Reno and Silver Legacy,” said Dan D’Arrigo, Executive Vice President, Chief Financial Officer and Treasurer of MGM Resorts. “MGM Resorts has enjoyed a long-standing relationship with the Carano family, who share many of the same core values as MGM. We believe that joining the Eldorado family will provide our employees with significant opportunities to grow and prosper.”

Mr. Carano added, “With the acquisition of Silver Legacy and Circus Circus Reno, we continue to execute our long-term plan for expansion. Upon completing the transaction, we will own the three leading downtown Reno casino resorts at a time when the Reno market and the surrounding region is recovering and attracting new businesses that should drive long-term economic support. I’m confident that the talent of our operating team, our understanding of the market — and long-term success in Reno — and our company-wide focus on excellence in guest service, combined with the market-leading amenities offered by Eldorado Reno, Silver Legacy and Circus Circus Reno, will position our company as a premier provider of casino gaming, entertainment, food and beverage and hospitality offerings in the Reno market.”

Tom Reeg, President of Eldorado, concluded, “This acquisition is another step toward our goal of expanding our property base and driving shareholder value. Since the acquisition of the MTR Gaming properties last September, we have made continuous progress in integrating these properties into our portfolio. Our experience in integrating MTR’s operations will serve us well as we welcome Silver Legacy and Circus Circus Reno into our operating base. With our proven management team, operating discipline and return-focused approach to capital expenditures, we believe the acquisition of Silver Legacy and Circus Circus Reno offers a meaningful opportunity for Eldorado Resorts and our shareholders.”

The Silver Legacy is a Nevada mining themed hotel-casino and entertainment complex which features an approximately 89,200-square foot gaming floor with 1,340 slot machines, 63 table games, 1,711 hotel rooms (including 141 player suites, eight penthouse suites and seven hospitality suites), a 50,000 square foot convention center, a race and sports book, two fine dining restaurants, a buffet, food court and four casual dining restaurants. Circus Circus Reno is an iconic, circus-themed hotel-casino and entertainment complex which features an approximately 56,000-square foot gaming floor with 906 slot machines, 35 table games, 1,571 hotel rooms (including 67 mini suites, four executive suites and four VIP suites), a sports book, two fine dining restaurants, a buffet and three casual dining restaurants. Circus Circus Reno also has a Midway featuring a total of 158 games and a full service wedding chapel with reception services for groups of 25 or more. Silver Legacy, Circus Circus Reno and the Company’s Eldorado Reno property are seamlessly connected by a 200-foot wide skyway corridor.

The transaction is subject to regulatory approvals and other customary closing conditions. The transaction is expected to be completed by year-end 2015.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Joe Kleiman
Joe Kleiman
Raised in San Diego on theme parks, zoos, and IMAX films, InPark's Senior Correspondent Joe Kleiman would expand his childhood loves into two decades as a projectionist and theater director within the giant screen industry. In addition to his work in commercial and museum operations, Joe has volunteered his time to animal husbandry at leading facilities in California and Texas and has played a leading management role for a number of performing arts companies. Joe previously served as News Editor and has remained a contributing author to InPark Magazine since 2011. HIs writing has also appeared in Sound & Communications, LF Examiner, Jim Hill Media, The Planetarian, Behind the Thrills, and MiceChat His blog, takes an unconventional look at the attractions industry. Follow on twitter @ThemesRenewed Joe lives in Sacramento, California with his wife, dog, and a ghost.

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