Sep 17, 2019

Blackstone Group in "advanced talks" to buy Bellagio and MGM Grand

Dan Primack, author of Pro Rata

The Bellagio hotel in Las Vegas. Photo: George Rose/Getty Images

The Blackstone Group is in "advanced talks" to buy and lease back the Bellagio and MGM Grand Las Vegas hotels and casinos from MGM Resorts International (NYSE: MGM), per Bloomberg. No financial terms were disclosed, but an earlier Bloomberg report valued the combined properties at around $7 billion.

Why it matters: This would be Blackstone's largest bet on the Vegas strip, where it has a mixed history.

  • The firm paid around $1.7 billion for the Cosmopolitan hotel and casino in 2014, and reportedly considered shopping it earlier this year with a $4 billion asking price.
  • But it also was part of disastrous pre-crisis deal for Harrah's, which later became known as Caesars Entertainment.

Lotta chips: Blackstone recently closed the largest real-estate private equity fund of all time, with $20.5 billion in commitments.

The bottom line: "Property sales free up cash for casino companies to expand while letting them continue to manage their resorts," per Bloomberg.

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