American casino operator, MGM Resorts International, is reportedly engaged in advanced negotiations that could see it sell its MGM Grand and Bellagio Las Vegas properties to private equity firm, Blackstone Group, for approximately $7 billion.
According to a Monday report from the Bloomberg news service, the giant casino firm is said to be exploring the possibility of offloading the iconic Las Vegas venues before leasing them back so as to be able to continue managing their casino operations. Doing so would allow MGM Resorts International to free up cash that it could then utilize to expand into the newborn Japanese market via the construction of an around $10 billion integrated casino resort.
Bloomberg reported that Las Vegas-headquartered MGM Resorts International established a special independent committee in January that has been tasked with evaluating ways for the firm to extract further value from its real estate portfolio. This body is now purportedly due to publish the findings of its investigation in the autumn following a move by activist hedge fund Starboard Value to build up a significant position in the casino firm.
Featuring over 6,800 rooms alongside a 171,500 sq ft casino, the 25-year-old MGM Grand is expected to fetch an asking price of up to $3 billion although Blackstone Group could be prepared to pay an even steeper $4 million for the newer but slightly smaller Bellagio Las Vegas. Both of these properties are purportedly well within the budget of the New York City-based organization after it raised a war chest last week worth some $20.5 billion to endow a ninth real estate fund.
Blackstone Group already has a significant presence in the Nevada gaming industry via its ownership of the 3,000-room The Cosmopolitan of Las Vegas while it inked a $1.8 billion deal early last year that saw it take control of Spain’s largest casino operator, Cirsa Gaming Corporation SA.