Casino Giant MGM Buys Cosmopolitan from Blackstone


After years of speculations that The Blackstone Group had been looking to offload The Cosmopolitan of Las Vegas, the New York private equity firm announced Monday that it has entered into an agreement to sell the Strip casino resort for $5.65 billion.

Las Vegas-based casino and hospitality giant MGM Resorts International would pay $1.63 billion for The Cosmopolitan’s operations.

Additionally, a partnership that includes the Cherng Family Trust, headed by the family of Panda Express founder Andrew Cherng, real estate investment firm Stonepeak Partners, and Blackstone-controlled Real Estate Income Trust Inc. will pay more than $4 billion the resort’s real estate assets.

MGM would enter into a long-term agreement with The Cosmopolitan’s new owners to run the property.

Blackstone purchased the resort in 2014 from Deutsche Bank for about $1.7 billion, which was less than half of what it had cost to build. The transaction enabled the major German lender to walk away from a hotel and casino complex that had been bleeding at least $100 million in net losses a year.

Blackstone has invested more than $500 million to renovate and expand the resort over the past seven years. The Cosmopolitan now features 3,000 rooms and suites, a casino, and dozens of food and beverage outlets, among other amenities. It is located in the heart of the Las Vegas Strip, a historically tourist heavy portion of the city that has seen tourism rebound strongly this year after a horrible 2020 that saw the closure of casinos and other non-essential businesses due to the coronavirus outbreak.

Resort’s Performance Stronger Than Ever

Blackstone said recently that The Cosmopolitan’s performance over the past several months has been stronger than ever and that it even exceeded pre-pandemic levels in the second quarter of 2021.

The property’s sale is expected to close in the first half of 2022, subject to regulatory approval.

The New York private equity company confirmed the sale of its Strip resort a few weeks after Bloomberg reported that it was looking to snatch at least $5 billion for The Cosmopolitan and named Apollo Global Management and MGM Resorts International as potential buyers.

It should be noted that MGM is currently in the process of divesting its Aria Resort & Casino and Vdara Hotel & Spa resorts namely to Blackstone.

The first round of rumors that the buyout firm was looking to sell The Cosmopolitan emerged in 2018. It was reported at the time that Florida-based Hard Rock International was in due diligence to buy the property. However, both Hard Rock and Blackstone denied those rumors promptly and the latter noted that selling the complex was not under consideration at the time.

The Wall Street Journal reported in April 2019 that Blackstone was assessing strategic options for the hotel and casino property, including its sale.

Source: Blackstone to sell The Cosmopolitan resort and casino for $5.65 billion, Reuters, September 28, 2021





Source link

Related Articles

Back to top button