he Mirage Casino Hotel, an MGM Mirage subsidiary, is selling Treasure Island Hotel & Casino to Ruffin Acquisition, LLC, wholly owned by Ruffin, for us$ 500 million in cash and us$ 275 million in secured notes paying 10% interest.
Of the notes portion, us$ 100 million is payable not later than 175 days after closing and us$ 175 million is payable not later than 24 months after closing. The us$ 500 million in cash is payable in full at closing. The notes, to be issued by Ruffin Acquisition, will be secured by the assets of Treasure Island Hotel & Casino and will be senior to any other financing.
"We are very excited to be in a position to acquire such a stellar property in Treasure Island," says Ruffin. "The property is in pristine condition, ideally located in the heart of the Strip and benefits from a wonderful team of outstanding employees." Most importantly, Ruffin adds, "We are financially positioned to close on this transaction once all of the necessary approvals have been received."
MGM Mirage acquired TI as part of the merger between MGM Grand 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."
The transaction is subject to customary closing conditions contained in the purchase agreement, including receipt of necessary regulatory and governmental approvals. MGM Mirage expects to report a substantial gain on the sale.
Treasure Island Hotel & Casino, on the Las Vegas Strip, features 8,361 sqm 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.
MGM Mirage, a New York Stock Exchange-traded company, has major holdings in gaming, hospitality and entertainment, owns and operates 17 properties located in Nevada, Mississippi and Michigan, and has 50% investments in four other properties in Nevada, New Jersey, Illinois and Macau.
MGM Mirage is developing major casino and non-casino resorts, separately and with partners in Las Vegas, Atlantic City, the People’s Republic of China and Abu Dhabi, U.A.E.