MGM Resorts to acquire The Cosmopolitan in $1.62bn deal
The agreement is subject to customary working capital adjustments.
MGM Resorts International has today announced that a definitive agreement has been reached with Blackstone for the acquisition of The Cosmopolitan of Las Vegas in a deal worth $1.625bn. This price is approximately eight times the property’s adjusted EBITDA.
“We are proud to add The Cosmopolitan, a luxury resort and casino on the Las Vegas Strip, to our portfolio,” said MGM Resorts CEO & president Bill Hornbuckle.
“The Cosmopolitan brand is recognized around the world for its unique customer base and high-quality product and experiences, making it an ideal fit with our portfolio and furthering our vision to be the world’s premier gaming entertainment company. We look forward to welcoming The Cosmopolitan’s guests and employees to the MGM Resorts family.”
Per the terms of the transaction, MGM Resorts will enter into a 30-year lease agreement with three 10-year renewal options. The agreement sees the casino operator enter into partnerships with Stonepeak Partners, the Cherng Family Trust, and Blackstone Real Estate Income Trust, who will acquire the Cosmopolitan’s real estate assets.
MGM Resorts will pay an annual rent of $200m, which will increase by 2% annually for 15 years.
“With over $500 million of capital invested to upgrade the property since 2014, The Cosmopolitan offers an incredible opportunity to expand our customer base and will provide greater depth of choices for our guests in Las Vegas,” added MGM Resorts CFO Jonathan Halkyard.
“We believe that we can leverage MGM Resorts’ expertise, operating platform, and other highly achievable synergies to continue providing best-in-class services while driving growth for the property.”
The Cosmopolitan first opened in 2010 and features a 110,000 square-foot casino, 3,032 hotel rooms, a nightclub, several restaurants, and a 243,000 square-foot meeting space. In the year before the Covid-19 pandemic, the property generated $959m of net revenue.
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