Under negotiation since last year, real estate investment firm VICI Properties and its partner, the financial conglomerate Blackstone, have finally agreed on the purchase of the MGM Grand and Mandalay Bay gaming properties. VICI Properties becomes the sole owner of these casinos. This subsidiary of the famous operator Ceasars Entertainment also intends to develop its acquisitions internationally, especially in Canada where it is still taking its first steps.
VICI buys Blackstone’s shares in the MGM Grand and Mandalay Bay gaming establishments
VICI Properties is buying the MGM Grand and the Mandalay Bay. The announcement came this Monday, January 9, 2023. The real estate investment company has finalized this acquisition with its partner Blackstone. Indeed, VICI Properties until now was only half owner of the MGM Grand and the Mandalay Bay. More exactly, it only held 50.1% of the capital of these gaming establishments. But now, thanks to this acquisition, VICI Properties becomes the sole shareholder. The company has just bought from the financial giant Blackstone, the totality of the shares in its possession, that is to say, 49,9 %, thus completing its assets to 100 % of the capital. VICI Properties is now the sole owner of the MGM Grand and Mandalay Bay.
Ceasars Intertainment is delighted with this acquisition and continues to expand its influence in the entertainment and leisure industry. The well-known operator, owner of the real estate investment company VICI Properties, which was established during the year of 2017 already has a wide network of influence on the famous Vegas Strip. Already owner of several prestigious establishments in Las Vegas, such as the famous Ceasars Palace or the New York-New York, the operator Ceasars Intertainment consolidates its position as a major player in the sector. With this new acquisition of the remaining shares of the MGM Grand and the Mandalay Bay, the operator via its subsidiary VICI Properties has just made a great achievement for this beginning of the year 2023.
The MGM Grand and the Mandaly Bay are two prestigious hotel-casinos that both offer gaming areas and more. They opened on December 18, 1993 and March 2, 1999 respectively. The MGM Grand has 6,852 rooms and suites, with approximately 16,000 square meters of gaming space. The Mandalay Bay has 3,309 rooms and suites and a gaming floor of over 12,500 square meters. In addition to the casino and hotel operations, the MGM Grand and the Mandalay Bay each offer its guests bars and restaurants, a wedding chapel and an entertainment venue.
The acquisition consisted of a cash payment and a deletion of Blackstone’s liabilities
The offer to buy Blackstone’s shares included a cash payment, but not only that. In the agreement between VICI Properties and Blackstone, unveiled last year in December, it was agreed that the REIT would pay $1.27 billion in cash, or about €1.18 billion. This amount was to be accompanied by a buyout of Blackstone’s debt on the same institutions, worth $1.5 billion, or about 1.4 billion euros.
It should be noted that, currently, the operator MGM Springs International owns the MGM Grand and the Mandalay Bay on a rental basis. According to some estimates, the annual rent of these two establishments should reach about 310 million dollars, or 288 million euros, by March 1, 2023 with the next increase.
VICI Properties shows explosive expansion
Ceasars Intertainment’s subsidiary is expanding its international footprint. VICI Properties doesn’t plan to limit itself to its local assets. The real estate investment company has just acquired four land-based casinos located in the province of Alberta in Canada. These gaming facilities were owned by Pure Canadian Gaming Corporation, a Canadian gaming operator. According to the contract signed between the two players, a long-term emphyteutic lease has been granted to the Canadian operator Pure Canadian Gaming Corporation. Pure Canadian Gaming Corporation will continue to manage and operate its sold casinos for a period of 25 years.
This expansion is the first of its kind, as announced by VICI Properties itself. It acknowledged in a January 9 communication that it had not previously made any foreign investments. This foray into the Canadian gaming market is therefore a first in its history.
Blackstone and VICI Properties dominate the industry
The Ceasars Entertainment subsidiary is consolidating its position as a major player in the U.S. gaming industry. Bolstered by the acquisition of the entire MGM Grand and the Mandalay Bay, VICI Properties is now the largest owner of real estate in the United States.