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Published Monday, Dec. 15, 2008 | 7:17 a.m.
Updated Monday, Dec. 15, 2008 | 2:51 p.m.
Updated story: For strapped casino giant, sale provides sure cash
MGM Mirage said this morning that its Treasure Island property will be sold to former New Frontier hotel owner Phil Ruffin.
MGM Mirage and Ruffin Acquisition LLC officially announced this morning that they have signed an agreement for $775 million. Phil Ruffin wholly owns Ruffin Acquisition LLC.
The purchase price to be paid at closing will be $500 million in cash and $275 million in secured notes bearing interest at 10 percent, with $100 million payable not later than 175 days after closing and $175 million payable not later than 24 months after closing.
The parties expect the transaction to close by the end of the second quarter of 2009.
MGM Mirage has owned Treasure Island since May 2000, when MGM Grand Inc. purchased Mirage Resorts Inc.
“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 MGM Mirage chairman and chief executive officer James J. Murren in a statement. “This transaction creates value to our stakeholders through significantly increased liquidity and enhanced financial flexibility.”
Treasure Island has 2,885 rooms, including 220 suites, and a 95,000-square-foot casino. The resort also has 18,000 square feet of convention space and hosts Cirque du Soleil's "Mystere."
Ruffin, a Wichita, Kan., businessman, is the former owner of the New Frontier hotel-casino, which closed on closed on July 16, 2007 and was imploded in November 2007 to make room for a multibillion-dollar resort bearing The Plaza brand, and the $1.2 billion Trump International Hotel & Tower that opened March 31 on the Las Vegas Strip.
Treasure Island was built for $450 million by casino mogul Steve Wynn, and opened in 1993 featuring a public pirate show set on a replica ship in front of the building.
“We are very excited to be in a position to acquire such a stellar property in Treasure Island,” Ruffin said in a statement. “The property is in pristine condition, ideally located in the heart of the Strip and benefits from a wonderful team of outstanding employees. We are financially positioned to close on this transaction once all of the necessary approvals have been received."
MGM shares rose 81 cents, or 7.6 percent, to close at $11.50 Monday.
The Associated Press contributed to this report.