MGM Purchases 50% Interest in CityCenter Holdings
MGM Resorts International has entered into a definitive agreement to purchase Infinity World Development Corp’s 50 percent interest in CityCenter Holdings LLC for $2.125 billion. The purchase price represents an implied valuation of $5.8 billion based on net debt of $1.5 billion, after giving weight to the recently closed sale of a 2-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 monetize 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.