BlackStone Group to Buy Vegas's MGM Grand and Mandalay Bay for $4.6 Billion

Matty-Sways

After inking a deal last year to buy the Bellagio, Blackstone buys up MGM Grand and Mandalay Bay casinos on Vegas Strip.

MGM Resorts International said a joint venture that includes Blackstone Group Inc. would buy the real estate of the MGM Grand and Mandalay Bay resorts and casinos on the Las Vegas Strip, in a deal valuing the properties at $4.6 billion.

The deal, first reported early Tuesday by The Wall Street Journal, values MGM Grand’s real-estate assets at about $2.5 billion and Mandalay Bay’s at just over $2 billion.

Blackstone will own slightly less than half of the properties through the private-equity and real estate giant’s nonlisted real estate investment trust, while MGM Growth Properties, which is a publicly traded REIT, will own the remainder. MGM Resorts spun off MGM Growth Properties in 2016 and still controls the REIT, which owns some MGM real estate including Mandalay Bay’s.

MGM Resorts expects to receive cash proceeds of about $2.4 billion from the deal, as well as $85 million in MGM Growth partnership units. The deal is similar to MGM Resorts’ sale of its flagship Bellagio casino in Las Vegas to Blackstone last year.

In October, Blackstone said its real-estate investment trust, known as BREIT, would take control of the Bellagio’s real estate through a $4.25 billion joint venture with MGM. MGM, which retained a 5% stake in the venture, continues to operate the casino and is renting the property from the venture for $245 million a year.

MGM Chief Executive Jim Murren said on a conference call in October that the company planned also to sell the MGM Grand and would use the Bellagio transaction as a blueprint for future real estate deals.

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