MGM Resorts International (MGM - Free Report) and its venture partner have signed an agreement with Eldorado Resorts, Inc. (ERI - Free Report) to sell the Grand Victoria Casino in Elgin, IL. Following the news, shares of Eldorado Resorts have surged 16.3%, while MGM Resorts witnessed a marginal gain of 1.1%.
Notably, the value of the deal stands at $327.5 million. The company expects to receive nearly $162 million from the sale as it only holds 50% stake in the Grand Victoria Casino. The deal is expected to be sealed within a year’s time.
Over the past decade, Grand Victoria Casino witnessed a sharp decline in revenues due to stiff competition from Rivers Casino, Grand Victoria Casino. Per Illinois Gaming Board, revenues from Grand Victoria Casino have decreased to $168.7 million in 2017 compared with $436.7 million in 2007.
Separately, in the previous week, the news of MGM Resorts International acquiring Wynn Resorts, Limited (WYNN - Free Report) , Limited also hit the headlines. According to New York Post, the company has approached Wynn Resorts through back-channel process. There is a 50% possibility that the deal might fall in place in the coming few months, per sources.
However, reportedly, MGM Resorts is eyeing to buy Wynn Boston Harbor Resort Casino in Everett, Massachusetts, the construction of which is still underway. In fact, Wynn Resorts has become the target of acquisition, following the resignation of Steve Wynn, the CEO and founder of Wynn Resorts. In February, this casino tycoon had to step down after several women complained that they were harassed or assailed by Wynn.
In the past six months, MGM Resorts shares have rallied 14.3%, outperforming the industry’s gain of 9.1%. The company’s strong portfolio, new resort openings, a few other entertainment offerings in the pipeline and focus on non-gaming activities bode well for long-term growth. Continual high revenues from its Las Vegas operations and MGM China are also encouraging.
MGM Resorts, which share space with Boyd Gaming Corporation (BYD - Free Report) , has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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