MGM Resorts International has completed its acquisition of The Cosmopolitan in Las Vegas, Nevada from private equity giant Blackstone for an initial cash consideration of $1.63bn (£1.30bn/€1.54bn).
Under the agreement, brokered in September of last year, MGM will own the operations of the property. Cherng Family Trust, Stonepeak Partners and Blackstone Real Estate Income Trust (BREIT) will own the real estate assets of the property itself.
MGM will lease the property from its new owners for 30 years, with three 10-year renewal options. It will pay an initial $200m per year in rent, with this total then increasing at between 2% and 3% per year, depending on inflation rates, placing the overall value of the deal at approximately $5.65bn.
Opened in December 2010, The Cosmopolitan has a 110,000sq ft casino, a hotel with 3,033 rooms, 26 food and beverage offerings, a 3,200-seat theatre and 36,000sq ft of leased retail space,
“This is a big moment for our company and for the Las Vegas Strip,” MGM president and chief executive Bill Hornbuckle said. “The Cosmopolitan of Las Vegas has already established itself as one of the Strip’s premier resorts with an iconic brand, well-curated experiences and a loyal customer base.
“We’re also thrilled to have the talented group of CoStars from The Cosmopolitan joining the MGM Resorts family. We look forward to improving upon The Cosmopolitan’s already strong results by offering their customers access to the extensive and exclusive amenities and other benefits only MGM Resorts can provide.”
The purchase comes after MGM Resorts earlier this month also agreed to acquire online gambling operator LeoVegas for approximately $607.0m.
MGM will pay SEK61 per share to acquire all of LeoVegas’ share capital, which LeoVegas noted was a premium of 44% compared to LeoVegas’ closing share price on 29 April. The operator said it will finance the deal through its existing cash reserves.
The LeoVegas board unanimously recommended the offer.