MGM Resorts Sell Gold Strike Tunica Hotel & Casino Resort to Cherokee Nation, Owners of Hard Rock For $450m
Main Photo: Golf at Tunica – several courses to choose from
Date: June 2022
Name: Gold Strike
Location: Tunica Resorts, 20 minutes south of Memphis, MS, USA
Number of Keys: 1,258
Seller: MGM Resorts International, whose portfolio encompasses 33 hotel and gaming destinations globally, including those under brands such as Bellagio, Aria, Delano and Mandalay Bay
Buyer: Cherokee Nation Entertainment Gaming Holdings, LLC, owners of Hard Rock Hotels & Resorts
MGM Resorts International announced that it has reached an agreement to sell the operations of Gold Strike Tunica to Cherokee Nation Entertainment Gaming Holdings, LLC, for $450 million in cash, subject to customary adjustments.
“I want to thank all of our Gold Strike employees who have consistently delivered world-class gaming and entertainment experiences to our guests,” said Bill Hornbuckle, CEO & President, MGM Resorts International. “Gold Strike is a wonderful property with a bright future ahead. Strategically, though, we decided to narrow our focus in Mississippi to a single resort – Beau Rivage – and dedicate more of our time and resources towards continuing to drive success at that leading, world-class resort and casino.”
For the twelve months ended December 31, 2021, Gold Strike reported net income of $81.1 million and Adjusted Property EBITDAR of $115 million, reflecting benefits from certain market specific factors in the last year. Pre-pandemic, Gold Strike reported Adjusted Property EBITDAR of $67 million in 2019. At the closing of the transaction, MGM Resorts’ master lease agreement with VICI Properties Inc., which currently includes Gold Strike, will be amended to reduce annual rent by $40 million. The Company expects net cash proceeds after taxes and estimated fees to be approximately $350 million.
“This is a great outcome for the Company as we are able to reprioritize future capital expenditures toward opportunities that will enhance the customer experience at our other locations,” said Jonathan Halkyard, CFO & Treasurer, MGM Resorts International. “We appreciate VICI, as the real estate owner of Gold Strike, working constructively with CNE to facilitate a new lease agreement.”
Gold Strike opened in 1994 and was acquired by MGM Resorts in 2005. At 32 stories tall, the iconic property is one of the most recognisable buildings in Tunica and towers above all other structures. When it was built the gold tower was reported to be the tallest building in Mississippi.
The transaction is expected to close in the first half of 2023, subject to regulatory approvals and other customary closing conditions. Weil, Gotshal & Manges LLP served as legal counsel to MGM Resorts.
Cherokee Nation owns and operates Hard Rock Hotel & Casino Tulsa and nine Cherokee Casinos, including a horse racing track, three resort hotels, three golf courses and other retail operations.
Price: US$450m
Price per Key: $358k to include the casino and entertainment space
THPT Comment: A good deal for both parties. The Cherokee Nation and it’s businesses employ 11,000 people.
First Seen: PR Newswire
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