MGM RESORTS INTERNATIONAL AND MGM GROWTH PROPERTIES COMPLETE TRANSACTION TO ACQUIRE EMPIRE CITY CASINO IN YONKERS, NEW YORK

“We are pleased to welcome the 1,200 employees at Empire City Casino to the MGM Resorts family,” said Jim Murren, Chairman and CEO of MGM Resorts. “Over the past three years, we have established a meaningful presence in the northeast with Borgata in Atlantic City, MGM National Harbor in Maryland, and MGM Springfield in Western Massachusetts. With this new addition to the MGM Resorts portfolio, we have now gained a foothold in the high-density New York City region and we look forward to leveraging the MGM platform to maximize value in this evolving marketplace.”

“What’s incredibly exciting is the amount of opportunity MGM Resorts will bring to the employees at Empire City, as well as Westchester County, the city of Yonkers, and the State of New York,” said Timothy J. Rooney, President and CEO of Empire City Casino. “With destinations throughout the world, from resorts to casinos to entertainment, MGM has a tried-and-true formula for success. They know how to build and grow properties that continually raise the bar in entertainment, travel, and leisure, and we are so thrilled to leave Empire City in MGM’s capable hands. What’s more, the potential for growth at Empire City has absolutely no boundaries. MGM will truly provide Empire City employees and the property’s guests with the resources and opportunities to make the casino and track into something we haven’t even yet realized. I cannot wait to see what’s to come!”

“Today, we continue to expand MGP’s best-in-class portfolio with the acquisition of the real estate assets of Empire City, expanding our geographic footprint to the New York City metropolitan area,” said James Stewart, CEO of MGM Growth Properties. “This financially accretive transaction further diversifies our existing market-leading regional portfolio and provides us with additional growth opportunities with a Right of First Offer on any potential capital improvements in the future. This is another excellent example of the power of our partnership with MGM Resorts.”

MGM Resorts’ funded the acquisition with approximately $360 million of cash on hand, the issuance of approximately 9.4 million shares of common stock, based on a volume weighted average price of a share of the Company’s common stock for a ten-trading-day period prior to the closing date, and the assumption of approximately $246 million in indebtedness. MGM Resorts has also agreed to pay an additional $50 million if Empire City is awarded a license for live table games on or prior to December 31, 2022 and MGM Resorts accepts such license by December 31, 2024.

MGP funded the acquisition of the developed real property from MGM Resorts through the assumption of approximately $246 million of indebtedness, which was repaid with borrowings under its senior secured credit facility, and the issuance of approximately 13 million operating partnership units to MGM Resorts based upon MGP’s closing price of $29.38 as of May 25, 2018. In addition, MGM Resorts has agreed to give MGP a right of first offer with respect to certain undeveloped land adjacent to the property to the extent MGM Resorts develops additional gaming offerings and chooses to sell or transfer the property in the future.

Empire City was added to the existing Master Lease between MGM Resorts and MGP, and the initial rent payment to MGP increased by $50 million. Consistent with the Master Lease terms, 90 percent of the increased rent will be contractually fixed to grow at two percent per year until 2022, and thereafter will continue to grow provided a tenant revenue to rent ratio is met. The remaining 10 percent is payable in percentage rent.

Empire City sits on a 97-acre property and serves approximately 16 million eligible gaming customers in southern New York. It is located only 15 miles from Times Square in Manhattan. Offering gaming, racing, dining, and entertainment, Empire City features over 5,200 of the latest slots and electronic table games, multiple dining outlets, and both live and simulcast horse racing.

BofA Merrill Lynch acted as exclusive financial advisor to MGM Resorts in connection with the transaction. PJT Partners LP is acting as financial advisor to the conflicts committee of the MGP Board of Directors.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these 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.

You must be logged in to post a comment Login