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Las Vegas casino owner MGM Resorts International is succumbing to mounting pressure from investors, announcing plans to put its properties in a REIT to boost its stock.
MGM CEO Jim Murren said the company had kicked around half-backed ideas before taking the REIT route, calling it "virtually friction-less." The new REIT, named MGM Growth Partners, assumes about $4B of debt. The transaction is set to close in Q1 '16.
MGM Resorts joins companies like Penn National Gaming and Caesars Entertainment in creating the REIT. And the gamble may have paid off already. Shortly after the announcement, MGM's shares rose as much as 7.4% while boosting market cap by around $500M.
MGM's contributed real estate will consist of 10 leasable properties, like the Mirage, Mandalay Bay and New York-New York, and have a total of 24,000 hotel rooms. [Bloomberg]
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