MGM to sell Bellagio for US$4.25 billion
Casino operator will lease property back and keep operating the casino
We are in Las Vegas for G2E 2019 and the expo is abuzz with news of the deal where MGM Resorts International is readying a joint venture of the Bellagio by selling the bulk of it to Blackstone Group for US$4.25 billion and keeping a 5% stake, leasing back the property for US$245 million annually and continuing all propertry operations.
MGM also announced the sale of Las Vegas Strip casino property Circus Circus for US$825 million to an affiliate of Treasure Island owner Phil Ruffin, with the sales freeing up cash to pay down debt and allow more investment in entertainment, sports betting, sports and a presence in Japan.
In a joint news release, MGM and real estate firm Blackstone confirmed in a statement that the deal will not alter MGM’s operation of the Las Vegas Strip casino and resort. “This transaction confirms the premium value of our owned real estate assets, highlights the unique value of Bellagio and solidifies our status as a premier operator of gaming and entertainment properties,” MGM Chairman and CEO Jim Murren said in a statement.
Murren predicted the deal would “create significant value for our shareholders.”
Blackstone Real Estate Income Trust will own the property when the deal closes, which is expected to happen before the end of the year. As part of the deal, a subsidiary of MGM will sign a long-term lease and pay annual rent of US$245 million.
Once the deal closes, MGM will receive cash proceeds of about US$4.2 billion.
“As big believers in MGM Resorts and Las Vegas, we are thrilled to partner with MGM to acquire the Bellagio on behalf of our BREIT investors,” Blackstone President and COO Jon Gray said in a statement. “We look forward to a long and productive partnership with this world-class company.”
