Hard Rock International assumed control of The Mirage Monday from MGM Resorts International, three days after the Nevada Gaming Commission gave regulatory approval for the transaction.
Under terms of the deal, Hard Rock paid $1.075 billion in cash for the operating assets of The Mirage. It also entered into a long-term lease agreement with VICI Properties Inc. for the Mirage’s real estate. Under previously announced terms, Hard Rock’s deal with VICI Properties starts at a base rent of $90 million a year.
The 3,044-room property will continue to operate as The Mirage Hotel & Casino until its renovation and rebranding into the Hard Rock Hotel & Casino Las Vegas is complete.
The process is anticipated to take an extended period, but “ultimately will dramatically reimagine every aspect of the resort” and change the Las Vegas skyline with the addition of a guitar-shaped hotel tower adjacent to the Strip. Hard Rock expects to release details and development timeline of the new resort at the end of 2023.
“Today, we’d like to officially welcome the 3,500 team members at The Mirage to the 45,000 global Hard Rock family and express our gratitude to the Nevada Gaming Control Board and the Nevada Gaming Commission for approving the gaming license for us to operate The Mirage Hotel & Casino,” Jim Allen, chairman of Hard Rock International said in a statement. “We’re creating an integrated resort on the Strip that will make this legendary entertainment community proud.”
Daily operations of the Las Vegas resort are set to continue under The Mirage brand for the foreseeable future and all room reservations and group bookings will be honored, with no action required by guests or group organizers, Allen said.
The Mirage will continue to offer existing dining and entertainment options, including Cirque Du Soleil’s The Beatles LOVE through 2023.
There are no plans to close The Mirage or to lay off any team members, as one media outlet incorrectly reported recently, Allen said.
Prior to 2020, Hard Rock International had no previous operational involvement with the former Hard Rock Hotel & Casino, now Virgin Hotels Las Vegas, at its off-Strip location.
HRI purchased the licensing and naming rights for Hard Rock Hotel & Casino Las Vegas in May 2020 with the intent to bring the iconic brand to the Strip when the right opportunity presented itself, Allen said.
MGM released its own announcement on Monday as well.
“Mirage employees have delivered unparalleled service and experiences over the past three decades and we are forever thankful for their work to make The Mirage such an iconic,world-class destination,” said Bill Hornbuckle, CEO and president of MGM Resorts International. said in a statement. “I’m excited for the opportunities for the property, its people, and the entire Las Vegas Strip with this prime location now under Hard Rock’s leadership.”
At the closing of the transaction, MGM Resorts’ master lease that currently includes The Mirage property will be amended to reduce the annual rent by $90 million. The company expects net cash proceeds after taxes and estimated fees to be approximately $815 million.
“The closing of this transaction represents another important step in the pursuit of our long-term strategic objectives,” said Jonathan Halkyard, CFO and treasurer of MGM Resorts International. “We plan to use the proceeds to further advance our capital-allocation strategy, which includes maintaining a strong balance sheet, pursuing targeted growth opportunities, and returning cash to our shareholders.”
Under the terms of the agreement, MGM Resorts will retain The Mirage name and brand, licensing it to Hard Rock royalty-free for a maximum of three years, while it finalizes its plans to rebrand the property, according to MGM.
B of A Securities and PJT Partners served as financial advisors and Weil, Gotshal & Manges LLP served as legal counsel to MGM Resorts.
Barclays served as exclusive financial advisor to Hard Rock International in connection with the transaction and Jones Day served as legal advisor to Hard Rock International together with Fox Rothschild LLP and McDonald Carano LLP as special gaming counsel.