MGM accepts bid from Eldorado
July 13, 2015
A big casino consolidation is coming to downtown Reno. Cost: $72.5 million.
In a joint statement released July 7, gambling operator MGM Resorts International announced that it accepted the winning bid for its Reno-based hotel and casino businesses from Eldorado Resorts. The latter company said it will purchase a 50 percent share in the Silver Legacy Resort and the entire Circus Circus Reno Hotel & Casino.
As the two operators wrote in a joint statement, Eldorado Resorts would pay $72.5 million and an additional $60 million outstanding under a credit facility of Silver Legacy.
In fact, the gaming company already owned the other half of the hotel and casino resort.
Eldorado Resorts, which trades on the Nasdaq exchange, is planning to finance its latest purchase with cash on hand and future financing and capital market transactions.
Once the acquisition is completed by the end of the year, it will give Eldorado seven casinos in five markets, including three resorts in downtown Reno.
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"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," Eldorado CEO Gary Carano said in a statement.
Carano said that once the deal is completed, his company would own three properties in Reno at a time when the city's casino industry is recovering and attracting new investors.
Silver Legacy is a 1,711-room mining-themed casino. Circus Circus Reno has 1,571 rooms and a carnival midway.
The two casino-hotels and Eldorado Reno are connected via indoor pedestrian bridges along North Virginia Street.
The sale will end MGM's casino operations in Reno. Circus Circus Las Vegas was not part of the transaction for the publicly traded company, which trades on the New York Stock Exchange.
The deal between MGM Resorts and Eldorado requires regulatory approval.