MGM selling two Reno casinos to Eldorado Resorts

MGM Resorts International is selling two Reno properties to a Northern Nevada casino company.

Eldorado Resorts will acquire MGM’s 50 percent interest in the Silver Legacy Resort as well as the entirety of Circus Circus Reno, the two casino companies announced today. Eldorado plans to pay $72.5 million in cash and will also pay about $60 million outstanding under a Silver Legacy credit facility, according to a statement from both companies.

Eldorado, which already owns the other 50 percent of the Silver Legacy, intends to finance the acquisition with cash on hand as well as “future capital market or financing transactions,” the statement said.

After the transaction closes, Eldorado will control seven properties in five markets — the company runs other casinos in Reno, Louisiana, Pennsylvania, Ohio and West Virginia.

“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,” Eldorado CEO Gary Carano said in the statement.

The sale marks the third time in recent months that MGM has sold properties it acquired when the company’s predecessor, MGM Mirage, bought Mandalay Resort Group in 2005. Previously,

MGM sold the Railroad Pass in Henderson and the Gold Strike in Jean.

Dan D’Arrigo, MGM’s executive vice president, chief financial officer and treasurer, said in the statement that the company has had a long relationship with the family at the helm of Eldorado Resorts, who he said “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," D’Arrigo said in the statement.

Carano said the deal furthers a long-term vision of expansion for Eldorado, which merged with MTR Gaming Group last year.

“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,” Carano said in the statement.

MGM is continuing to grow in a big way, too — outside Nevada. The Las Vegas-based casino giant is building new resorts in Maryland, Massachusetts and Macau.

The sale announced today still needs regulatory approval. The companies expect to complete the transaction by the end of the year.

Gaming

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