Wed, Aug 12, 10:14am by Noah Taylor
A media mogul has purchased a near $1 billion stake in MGM Resorts.
CNN Business reports that the stake was purchased by Interactivecorp (IAC), a conglomerate run by media mogul Barry Diller.
The amount purchased amounts to about a 12 per cent interest in the Las Vegas-based global casino and hotel giant.
Shares of MGM Resorts surged nearly 15 per cent on the back of the news, while IAC’s stock was down about two per cent.
IAC has been actively shaking up its portfolio in recent months.
The company completed its sale of Match shares last month after announcing plans to do so in December.
It also agreed in December to buy Care.com, a company that helps people find caregivers and housekeepers, for $500 million.
IAC also owns digital content brand DotDash and video tools firm Vimeo.
But the MGM Resorts investment could be Diller’s boldest move yet.
He said in a press release the new IAC has a healthy balance sheet and “its opportunistic zeal intact.”
“We are energised and excited to make this investment in MGM,” he said, adding that IAC is particularly interest in “an area that currently comprises a tiny portion of its revenue – online gaming.”
IAC chief executive officer Joey Levin added: “MGM Resorts presents a unique opportunity for IAC to own a meaningful piece of a pre eminent brand in a large category with immense potential,” noting IAC plans to be a “minority investor and long-term strategic partner.”
MGM Resorts chairman Paul Salem noted that IAC can help MGM continue to grow its digital gaming and sports betting businesses.
Big casino companies like MGM and rivals Wynn Resorts and Las Vegas Sands have struggled this year as the coronavirus pandemic led to a slowdown in travel to Las Vegas and Asian gaming mecca Macau.
— Inquisitive Investor (@QuisitiveInvest) August 10, 2020
Casino giant MGM Resorts International has offloaded two more Las Vegas properties as part of its strategy to become an asset-light company as it seeks to strengthen its balance sheet.
Casino News Daily reported in January that the gambling company said this week that its real estate investment trust, MGM Growth Properties, has entered into a definitive agreement with Blackstone Real Estate Income Trust to form a joint venture and acquire the real estate assets of MGM Grand and Mandalay Bay.
MGP spun off from MGM in 2015, while BREIT is an entity of New York financial giant The Blackstone Group.
Under the terms of the recently agreed acquisition, MGP and BREITs joint venture will take over the real estate assets of premier Las Vegas Strip resorts MGM Grand and Mandalay Bay in a deal that values the two properties at $4.6 billion.
MGP will own 50.1 per cent of the joint venture, while BREIT will own the remaining 49.9 per cent.
The transaction is expected to close by the end of this quarter, subject to certain customary conditions.
Once the deal is finalised, MGM will enter into a long-term triple net master lease for the two major casino resorts and will remain responsible for their day-to-day operations and provide their new owners with annual rent payments.
The initial annual rent will be $292 million.
Together, MGM Grand and Mandalay Bay feature 9.743 hotel rooms and suites, more than three million square feet of meeting space, and approximately 300,000 square feet of casino space with diverse gambling options.
The sale of MGM Grand and Mandalay Bay did not come as a surprise as MGM revealed last year that it was in talks with suitors who were interested to purchase the two marquee properties.
It emerged this past November that MGM and its REIT were looking to channel interest from companies that have been historically interested in Strip resorts and that a buyer for MGM Grand and Mandalay Bay could be announced by the end of 2019.
A new national integrity group for Australia’s casinos is being developed. The Australian Business Review reports a former deputy commissioner of the…
A punter has taken an Australian sportsbook and casino to court over unpaid gambling winnings. Calvin Ayre reports Australian woman Renee Bell…
An American woman has won a massive poker machine jackpot. WMC Action reports a Mississippi woman has won $1.235 million at a…