MGM Resorts Makes a Deal to Sell MGM Grand, Mandalay Bay to Joint Venture -- 2nd Update
By Katherine Sayre, Miriam Gottfried and Cara Lombardo
MGM Resorts International agreed 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.
News of the deal was first reported by The Wall Street Journal.
The deal values the MGM Grand Las Vegas real-estate assets -- the
company's largest property by square footage, as of its most recent
annual financial filing -- at about $2.5 billion.
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, according
to people familiar with the matter.
MGM Resorts expects to receive cash proceeds of about $2.4
billion from the deal, as well as $85 million in MGM Growth
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 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
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 transactions, when totaled, are expected to provide
$8.2 billion in cash proceeds to MGM, the company said.
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 firstname.lastname@example.org, Miriam
Gottfried at Miriam.Gottfried@wsj.com and Cara Lombardo at
(END) Dow Jones Newswires
January 14, 2020 09:50 ET (14:50 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Historical Stock Chart
From Dec 2020 to Jan 2021
Historical Stock Chart
From Jan 2020 to Jan 2021