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MGM Resorts becomes the owner of CityCenter in Vegas

MGM Resorts International

has concluded a purchase contract 125 percent 125 Infinity World Development Corp participation in CityCenter Holdingsmaking it the sole owner.

A purchase price of $ 2.125 billion represents an implied valuation of $ 5.8 billion based on $ 1.5 billion net debt, following the recently completed sale of a two-acre plot of land. The lane where the CityCenter is located is also home to the Aria Resort & Casino and Vdara Hotel and Spa, which the company plans to monetize.

Bill Hornbuckle, CEO and president of MGM Resorts

, commented: “CityCenter has consistently improved the quality of Las Vegas over the years, contributing to the undeniable position of this bustling city as a premier tourist and business destination. Combining the entire CityCenter within MGM Resorts' corporate structure and strategy will allow us to consolidate our bottom line, build on our efforts to strengthen our operating model and guest experience, and make our vision of becoming the world's leading gaming entertainment company a reality. "

Moreover, the company concluded an agreement with Blackstone

to cash in on Aria's and Vdara's real estate assets, pending completion of the equity purchase agreement between MGM Resorts and Infinity World.

The funds managed by Blackstone will purchase the property for 3.50 billion cash, which is a multiple of 07.1x the rent. Both properties will be leased to MGM Resorts upon reaching them, with an annual rent of $ 215 million.

Hornbuckle, commenting on the deal, said: “This deal demonstrates the unprecedented premium value of our real estate assets and is a testament to Aria and Vdara's status as top destinations on the Las Vegas Strip. We expect to continue to pursue our asset-light strategy and use the proceeds from our real estate transactions to increase our financial flexibility and provide new growth opportunities. ”

Expected to close in the third quarter, trades are subject to certain closing conditions. For Infinity World transactions, this is not conditional upon closing the transaction with Blackstone.

Tyler Henritze, head of the US acquisitions division of Blackstone Real Estate, said: “This transaction reflects our high confidence in Las Vegas and our strong partnership with MGM Resorts. CityCenter is a best-in-class facility and a complementary addition to our portfolio of high-quality assets on the Strip. We look forward to continuing the fruitful collaboration with MGM Resorts.

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