MGM Resorts To Acquire Operations Of The Cosmopolitan Of Las Vegas For $1.6B

  • MGM Resorts International (NYSE: MGM) has signed an agreement with Blackstone Inc (NYSE: BX) to acquire the operations of The Cosmopolitan of Las Vegas for cash consideration of $1.625 billion, subject to customary working capital adjustments.

  • The Cosmopolitan is a luxury resort and casino on the Las Vegas Strip. Blackstone acquired The Cosmopolitan in 2014.

  • The purchase price represents a multiple of about eight times adjusted EBITDA, including expected operational synergies and identified revenue growth opportunities.

  • After the deal close, 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.

  • The transaction is expected to close in the first half of 2022.

  • MGM Resorts held $5.6 billion in cash and equivalents as of June 30, 2021.

  • Price Action: MGM shares are trading higher by 1.58% at $45.32 on the last check Monday.

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