MGM Resorts selling Aria, Vdara in lease-back deal to net $3.89 billion

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LAS VEGAS, NEVADA – APRIL 03: Aria Resort & Casino makes a positive post on their marquee with “Even apart, We’re in this together.” text amid ongoing spread of the coronavirus (COVID-19) outbreak across the United States on April 03, 2020 in Las Vegas, Nevada. The World Health Organization declared the coronavirus (COVID-19) as a global pandemic on March 11th. (Photo by Jacob Kepler/Anadolu Agency via Getty Images)

LAS VEGAS (KLAS) — MGM Resorts International has agreed to sell Aria Resort Casino and Vdara Hotel and Spa to a private equity firm for $3.89 billion in cash, the company announced today.

But first, MGM is buying out CityCenter partner Infinity World, which owns a 50% stake in CityCenter. That buyout will cost MGM $2.1 billion. When that deal is complete, MGM will sell the properties to Blackstone, the private equity firm.

The Blackstone deal will then allow MGM to lease back the hotels and continue operating them. Rent will cost MGM $215 million a year.

In the end, MGM will have more cash in its pocket for expanding sports betting ventures and possible casino development in Japan, according to a Reuters report on Thursday morning.

“We expect to continue executing on our asset-light strategy and utilizing the proceeds from our real estate transactions to … secure new growth opportunities,” MGM Resorts Chief Executive Bill Hornbuckle told Reuters.

The deals are expected to be complete in the third quarter of this year.

U.S. casino companies have been expanding their sports betting empires, and the cash raised in the deals announced today could play into mergers or buyouts related to that.

MGM has been working toward building in Japan, as well.

Tyler Henritze, Head of U.S. Acquisitions Americas for Blackstone Real Estate, said: “This transaction reflects our high conviction in Las Vegas and our strong partnership with MGM Resorts. CityCenter is a best-in-class resort and complementary addition to our portfolio of high-quality assets on the Strip. We look forward to continuing our productive collaboration with MGM Resorts.”

The deal to buy out Infinity World’s stake in CityCenter will move forward even if there is a problem competing the Blackstone deal, according to an MGM statement.

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