Feb 20 MGM Resorts International
Chairman Jim Murren said he has been approached by potential
buyers for the Crystals luxury mall in its $8.5 billion Las
Vegas CityCenter joint venture complex.
"CityCenter is always looking for ways to improve the value
for its shareholders ... and I think the most attractive
candidate down the road would be Crystals," Murren told analysts
on a conference call.
"We've gotten a bunch of inquiries over the last six months.
Crystals could raise a tremendous amount of money for its
owners," Murren told Reuters, referring to the mall that is home
to high-end retailers including Jimmy Choo, Hermes, Harry
Winston and Gucci.
MGM Resorts reported quarterly earnings earlier on
Wednesday. Its shares fell 1.6 percent to close
at $12.54 on the New York Stock Exchange.
CityCenter, a city-within-a-city jointly owned by MGM
Resorts and Dubai World Corp, has struggled since
opening in late 2009 amid Las Vegas' downturn. But analysts
believe that MGM, which competes with Las Vegas Sands Corp
and Wynn Resorts Ltd, is finally turning the
corner on the costly project.
One of the biggest privately financed developments in the
United States, the 67-acre complex took five years to build.
When it opened, it expanded Las Vegas' hotel and retail
inventory at a time when visitation was falling sharply.
Murren said MGM was not in negotiations yet but expected
CityCenter to reach its full potential over the next couple of
years, and that selling Crystals had always been a goal.
"CityCenter's higher cash-flow days are upon us. Its
(Crystals) growth rate is very appealing and it has trophy
assets. It's a very appealing asset at a time when real estate
investments are becoming more coveted."
MGM Resorts said CityCenter posted fourth-quarter earnings
before interest, taxes, depreciation and amortization (EBITDA)
of $68 million, up 17 percent from a year earlier.
Crystals had 2012 net revenue of $54 million and cash flow
of $32 million, up from 2011 net revenue of $46.3 million and
cash flow of $24 million.
The heavily leveraged casino operator, which had more than
$12 billion in debt in late 2012, announced $5 billion in new
financing in December that is helping to cut interest costs.
Like many of its competitors, MGM plans to expand further in
China's Macau gambling region, but it relies more heavily than
Las Vegas Sands and Wynn on the Las Vegas strip for its
The Las Vegas Convention and Visitors Authority said 2012
was a record year, with about 40 million visitors, surpassing
the 2007 record of 39.2 million.