MGM MIRAGE Enters Into Agreement to Sell Treasure Island to Phil Ruffin (United States)
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MGM MIRAGE Enters Into Agreement to Sell Treasure Island to Phil Ruffin (United States)
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Category: North America & West Indies / Carribean islands - United States - Industry economy
- Group or hotel buyout
This is a press release selected by our editorial committee and published online for free on 2008-12-16
MGM MIRAGE (NYSE: MGM) and Ruffin Acquisition, LLC today announced that they have entered into an agreement whereby MGM MIRAGE, through its wholly-owned subsidiary The Mirage Casino-Hotel, will sell Treasure Island Hotel & Casino ("TI") to Ruffin Acquisition, LLC for $775 million. Ruffin Acquisition, LLC is wholly owned by Phil Ruffin.
The purchase price is to be paid at closing as follows: $500 million in cash and $275 million in secured notes bearing interest at 10%, with $100 million payable not later than 175 days after closing and $175 million payable not later than 24 months after closing. The notes, to be issued by Ruffin Acquisition, LLC, will be secured by the assets of TI and will be senior to any other financing.
The transaction is subject to customary closing conditions contained in the purchase agreement, including receipt of necessary regulatory and governmental approvals. The parties expect the transaction to close by the end of the second quarter of 2009. MGM MIRAGE expects to report a substantial gain on the sale.
MGM MIRAGE acquired TI as part of the merger between MGM Grand, Inc. and Mirage Resorts, Incorporated in May 2000.
"We are extremely proud of the accomplishments of Treasure Island's employees and management team in making it one of the must-see properties in Las Vegas," said James J. Murren, Chairman and Chief Executive Officer of MGM MIRAGE. "We are pleased to have been able to work with Phil Ruffin, a known and trusted community partner. This transaction creates value to our stakeholders through significantly increased liquidity and enhanced financial flexibility."
TI is located on the Las Vegas Strip and features 2,885 guest rooms and suites, approximately 90,000 square feet of gaming space, several fine and casual dining outlets, The Sirens of TI -- the iconic pirate battle attraction, and Mystere, the first permanent production in Las Vegas by Cirque du Soleil.
"We are very excited to be in a position to acquire such a stellar property in Treasure Island," said Mr. Ruffin. "The property is in pristine condition, ideally located in the heart of the Strip and benefits from a wonderful team of outstanding employees. We are financially positioned to close on this transaction once all of the necessary approvals have been received," Mr. Ruffin noted.
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