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US – MGM buys out partner in CityCenter for $2.125bn

By - 1 July 2021

MGM Resorts International has bought out Infinity World Development Corp’s 50 per cent interest in CityCenter Holdings for $2.125bn.

The purchase price represents an implied valuation of $5.8m based on net debt of $1.5m, after giving effect to the recently closed sale of a two-acre parcel. The agreement will make MGM Resorts the 100 percent owner of CityCenter on the Las Vegas Strip, which is comprised of Aria Resort & Casino and Vdara Hotel and Spa.

“CityCenter has consistently elevated the Las Vegas experience over the years, contributing to this vibrant city’s undeniable position as a top tourism and business destination,” said Bill Hornbuckle, CEO and President of MGM Resorts. “Uniting all of CityCenter under MGM Resorts’ corporate structure and strategy will allow us to consolidate financial results, build on efforts to strengthen our operating model and guest experience and further our vision of becoming the world’s premier gaming entertainment company.”

MGM Resorts has also entered into a definitive agreement with Blackstone to monetise the Aria and Vdara real estate assets, pending the close of the equity purchase agreement between MGM Resorts and Infinity World. Under terms of the agreement, funds managed by Blackstone will acquire the Aria and Vdara real estate for $3.89 billion in cash, which represents a multiple of 18.1x rent. Following the acquisition, both properties will be leased to MGM Resorts for initial annual rent of $215 million.

Regarding the real estate agreement with Blackstone, Hornbuckle added, “This transaction demonstrates the unprecedented premium value of our real estate assets and is a testament to Aria and Vdara’s status as premier destinations on the Las Vegas Strip. We expect to continue executing on our asset-light strategy and utilizing the proceeds from our real estate transactions to enhance our financial flexibility and secure new growth opportunities.”

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.”

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