MGM Resorts Nears Deal to Sell MGM Grand, Mandalay Bay to Joint Venture --Update
January 14 2020 - 8:36AM
Dow Jones News
By Katherine Sayre, Miriam Gottfried and Cara Lombardo
MGM Resorts International is nearing an agreement to sell the
MGM Grand and Mandalay Bay resorts and casinos on the Las Vegas
Strip to a joint venture that includes private-equity and
real-estate giant Blackstone Group Inc., according to people
familiar with the matter.
Blackstone would own slightly less than half of the properties
through its private real-estate investment trust, while MGM Growth
Properties LLC, a public REIT, would own the remainder, the people
said. The total purchase price couldn't be learned, but the deal
values MGM Grand, the company's largest property by square footage
as of its most recent annual financial filing, at roughly $2.5
billion, the people said.
The deal is expected to be similar to MGM Resorts' sale of its
flagship Bellagio casino in Las Vegas to Blackstone last year.
In October, Blackstone said its private real-estate investment
trust, known as BREIT, would take control of the Bellagio 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 to also sell the MGM Grand, using
the Bellagio transaction as a blueprint for future real-estate
deals.
The MGM Grand Las Vegas includes a hotel and resort as well as
three condominium towers.
MGM sold another Las Vegas Strip casino, Circus Circus, to Phil
Ruffin, who also owns the Treasure Island casino, for $825 million
last year.
The MGM Grand sale would be another step in MGM's "asset light"
strategy intended to pull cash out of its real estate and focus on
new business areas including sports betting, entertainment and a
casino development in Japan. The company, which has a market value
of about $17 billion, began evaluating real-estate deals to help
pay off debt after its board of directors formed a real-estate
committee in January 2019.
Write to Katherine Sayre at katherine.sayre@wsj.com, Miriam
Gottfried at Miriam.Gottfried@wsj.com and Cara Lombardo at
cara.lombardo@wsj.com
(END) Dow Jones Newswires
January 14, 2020 08:21 ET (13:21 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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