LAS VEGAS, Sept. 27, 2021 /PRNewswire/ -- MGM Resorts
International (the "Company" or "MGM Resorts") (NYSE: MGM) today
announced that the Company has entered into a definitive agreement
with Blackstone to acquire the operations of The Cosmopolitan of
Las Vegas (the "property" or "The
Cosmopolitan") for cash consideration of $1.625 billion, subject to customary working
capital adjustments.
The purchase price represents a multiple of approximately eight
times adjusted EBITDA, inclusive of expected operational synergies
and identified revenue growth opportunities.
Following the close of the transaction, MGM Resorts will enter
into a 30-year lease agreement, with three 10-year renewal options,
with a partnership among Stonepeak Partners, Cherng Family Trust
and Blackstone Real Estate Income Trust, Inc. ("BREIT"), which will
acquire The Cosmopolitan's real estate assets. MGM Resorts will pay
an initial annual rent of $200
million, escalating annually at 2% for the first 15 years
and the greater of 2% or the CPI increase (capped at 3%)
thereafter.
"We are proud to add The Cosmopolitan, a luxury resort and
casino on the Las Vegas Strip, to our portfolio," said MGM Resorts
CEO & President Bill Hornbuckle.
"The Cosmopolitan brand is recognized around the world for its
unique customer base and high-quality product and experiences,
making it an ideal fit with our portfolio and furthering our vision
to be the world's premier gaming entertainment company. We look
forward to welcoming The Cosmopolitan's guests and employees to the
MGM Resorts family."
"With over $500 million of capital
invested to upgrade the property since 2014, The Cosmopolitan
offers an incredible opportunity to expand our customer base and
will provide greater depth of choices for our guests in
Las Vegas," said MGM Resorts CFO
Jonathan Halkyard. "We believe that
we can leverage MGM Resorts' expertise, operating platform and
other highly achievable synergies to continue providing
best-in-class service, while driving growth for the property."
Prior to the COVID-19 pandemic in the trailing 12 months ended
February 29, 2020, The Cosmopolitan
generated $959 million of net revenue
and $316 million of adjusted
EBITDAR1. In the second quarter ended June 30, 2021, the property generated
$234 million of net revenue and
$92 million of adjusted
EBITDAR1.
The Cosmopolitan, a world-class contemporary luxury resort and
casino, opened in December of 2010 and underwent significant
capital improvements since Blackstone acquired the property in
2014. The property features:
- 3,032 rooms and suites that were renovated in December of 2018,
most of which feature a terrace that overlooks the iconic Las Vegas
Strip,
- a 110,000 square-foot casino, with high-end gaming areas for
VIP guests,
- 26 on-trend food and beverage offerings, with 19 new concepts
introduced in the last four years,
- a 3,200 seat theater (The Chelsea),
- Marquee nightclub and dayclub that hosts top DJs from around
the world,
- 243,000 square feet of centrally located meeting space,
featuring state-of-the-art technology to accommodate both large and
small groups,
- 21,000 square feet of leased retail space, and
- a 40,000 square foot spa and fitness facility.
The transaction is expected to close in the first half of 2022,
subject to regulatory approvals and other customary closing
conditions.
1 Calculated as EBITDA before rent, impairment
loss and pre-opening expenses, and after corporate expenses.
ABOUT MGM RESORTS INTERNATIONAL
MGM Resorts
International (NYSE: MGM) is an S&P 500® global entertainment
company with national and international locations featuring
best-in-class hotels and casinos, state-of-the-art meetings and
conference spaces, incredible live and theatrical entertainment
experiences, and an extensive array of restaurant, nightlife and
retail offerings. MGM Resorts creates immersive, iconic experiences
through its suite of Las
Vegas-inspired brands. The MGM Resorts portfolio encompasses
31 unique hotel and destination gaming offerings in the United States and Macau, including some of the most recognizable
resort brands in the industry such as Bellagio, MGM Grand, ARIA and
Park MGM. The Company's 50/50 venture, BetMGM, LLC, offers U.S.
sports betting and online gaming through market-leading brands,
including BetMGM and partypoker. The Company is currently pursuing
targeted expansion in Asia through
the integrated resort opportunity in Japan. Through its "Focused on What Matters:
Embracing Humanity and Protecting the Planet" philosophy, MGM
Resorts commits to creating a more sustainable future, while
striving to make a bigger difference in the lives of its employees,
guests, and in the communities where it operates. The global
employees of MGM Resorts are proud of their company for being
recognized as one of FORTUNE® Magazine's World's Most Admired
Companies®. For more information, please visit us at
www.mgmresorts.com. Please also connect with us @MGMResortsIntl on
Twitter as well as Facebook and Instagram.
FORWARD-LOOKING STATEMENTS
Statements in this release
that are not historical facts are forward-looking statements,
within the meaning of the Private Securities Litigation Reform Act
of 1995, as amended, and involve risks and/or uncertainties,
including those described in the Company's public filings with the
Securities and Exchange Commission. Forward-looking statements can
be identified by the use of forward-looking terminology such as
"believes," "expects," "could," "may," "will," "should," "seeks,"
"likely," "intends," "plans," "pro forma," "projects," "estimates"
or "anticipates" or the negative of these words and phrases or
similar words or phrases that are predictions of or indicate future
events or trends and that do not relate solely to historical
matters. The Company has based forward-looking statements on
management's current expectations and assumptions and not on
historical facts. Examples of these statements include, but are not
limited to, the Company's expectations regarding the closing of the
acquisition and any benefits expected to be received from the
acquisition. Forward-looking statements depend on assumptions, data
or methods that may be incorrect or imprecise, and the Company may
not be able to realize them. The Company does not guarantee that
the transaction or other events described herein will happen as
described (or that they will happen at all). These forward-looking
statements involve a number of risks and uncertainties. Among the
important factors that could cause actual results to differ
materially from those indicated in such forward-looking statements
include risks related to the Company's ability to complete the
transaction on the terms described herein or all, the satisfaction
of the closing conditions, including the receipt of regulatory
approvals, to which the completion of the transaction is subject,
which could delay or prevent the completion of the transaction, the
continued impact of the COVID-19 pandemic on the Company's
business, the effects of economic conditions and market conditions
in the markets in which the Company operates and competition with
other destination travel locations throughout the United States and the world, the design,
timing and costs of expansion projects, risks relating to
international operations, permits, licenses, financings, approvals
and other contingencies in connection with growth in new or
existing jurisdictions and additional risks and uncertainties
described in the Company's Form 10-K, Form 10-Q and Form 8-K
reports (including all amendments to those reports). In providing
forward-looking statements, the Company is not undertaking any duty
or obligation to update these statements publicly as a result of
new information, future events or otherwise, except as required by
law. If the Company updates one or more forward-looking statements,
no inference should be drawn that it will make additional updates
with respect to those other forward-looking statements.
MGM RESORTS CONTACTS:
Media:
|
Investment
Community:
|
BRIAN
AHERN
|
CATHERINE
PARK
|
Director, Media
Relations
|
Executive
Director, Investor Relations
|
media@mgmresorts.com
|
cpark@mgrmesorts.com
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/mgm-resorts-international-announces-transaction-to-acquire-the-operations-of-the-cosmopolitan-of-las-vegas-301385470.html
SOURCE MGM Resorts International