MGM Resorts International (NYSE:MGM) reached an agreement to acquire NP1 Hong Kong Limited, NP1 Pegasus LLC and Nevada Property 1 LLC for $1.6 billion on September 26, 2021. Under the terms of agreement, MGM Resorts International is acquiring operations of The Cosmopolitan paying $1.625 billion of cash consideration and with payment of initial annual rent of $200 million, escalating annually at 2% for the first 15 years and the greater of 2% or the CPI increase (capped at 3%) thereafter. In a related transaction, partnership among Stonepeak Partners, Cherng Family Trust and Blackstone Real Estate Income Trust, Inc. ("BREIT") will acquire The Cosmopolitan's real estate assets for $4.025 billion. Following the close of the transaction, MGM Resorts will enter into a 30-year lease agreement, with three 10-year renewal options, with a partnership among Stonepeak Partners, Cherng Family Trust and Blackstone Real Estate Income Trust, Inc. ("BREIT"). NP1 Hong Kong Limited, NP1 Pegasus LLC and Nevada Property 1 LLC will become wholly-owned subsidiaries of MGM. As a part of acquisition, Blackstone also reached agreements with unions at the property and secured approximately 3,000 stable jobs for professionals that will continue to serve guests of the hotel. BREP conducted a thorough process, throughout which it considered a broad range of potential options for The Cosmopolitan and determined that separating the asset's operations from the underlying real estate would result in an optimal outcome.

The Purchase Agreement contemplates a reverse termination fee of $500 million that is payable by MGM in the event that the parties are unable to obtain antitrust or gaming regulatory approval. The purchase price represents a multiple of approximately eight times adjusted EBITDA, inclusive of expected operational synergies and identified revenue growth opportunities. The transaction is subject to regulatory approvals and other customary closing conditions and working capital adjustments. The transaction is expected to close in the first half of 2022. Deutsche Bank Securities Inc. and PJT Partners served as financial advisors and Gregory J. Ressa, Erik G. Quarfordt, and Anthony D. King of Simpson Thacher & Bartlett LLP served as legal advisors to Nevada Property 1 LLC. Annemargaret Connolly, Brianne L. Kucerik, Charan J. Sandhu, David F. Levy, Joe Pari, John Patrick Barry, Kevin J. Sullivan, Michael J. Aiello, Nellie P. Camerik, Nicholas J. Pappas, Paul J. Wessel, Sachin Kohli, Shawn Brett Cooley, Steven A. Newborn, Vadim M. Brusser, Jannelle Seales and W. Michael Bond of Weil, Gotshal & Manges LLP acted as legal advisor to MGM Resorts International. Andrew T. Kirsh and Peter R. Fischer of Sklar Kirsh LLP acted as legal advisors to Cherng Family Trust and Kevin Yee of The Waban Group.

MGM Resorts International (NYSE:MGM) completed the acquisition of NP1 Hong Kong Limited, NP1 Pegasus LLC and Nevada Property 1 LLC on May 17, 2022.