Strip Property being sold?

http://www.vegasdeluxe.com/blogs/luxe-life/2013/mar/14/wicked-whispers-racy-rumors-strip-hotel-buyer-cloo/

 

So its gotta be an MGM property. Conglomerate means MGM or CET and really CETs prestigious hotel is Caesars and I doubt Caesars is letting Caesars go, I guess it could be Planet Hollywood or Paris but that might stretch prestigious.

 

It says the hotel is owned by a banking group -- that's how I read it at least. Aren't Cosmopolitan and Riviera the only hotels owned by banks? I'll guess its cosmopolitan. Makes sense a nightlife group would want to raise money from investors to buy it from the Wall Street bank that owns and probably wants to get rid of it. They only own it because they had to after the project ran out of money right?

 

Hmm, the two key words are prestegious and crushing debt. CET has debt, but not crushing debt. Not to mention they would never sell Caesars Palace. That leaves MGM.

The only hotels MGM owns which I would deam "Prestigious" would be the following

- Bellagio
- Aria
- MGM Grand

With the decoupling of the City Center brand it could be possible Aria would go, however I think Aria is the new Jewel in the MGM hotel chain. I doubt they would dump Aria.

MGM Grand is getting a ton of money poured into it with the Grand Remodel and Hakkasan, so I doubt they would dump this hotel, this far into the remodel, but a nightlife entertainment group is driving the purchase.

Now the Bellagio has the image and prestige as a prized hotel for a group of investors to make a run at it. My bet is on MGM selling out Bellagio given their investment in City Center's Aria. Plus they could fetch premium dollar for the place.

 

Light Group which was bought by Morgan's is going to be running The Hotel as the Delano

This is Robin Leach we're talking about, he's prone to over exageration

 

Yeah, but the big dilema MGM faces this year is a 1.5 billion debt payment they are looking to offload. Bellagio could fetch that amount, and it would position MGM to get their head above water given that they are actually making some money over debt payments.

CET is just covering right now, but has some breathing room till 2015-16 before they feel the hammer drop. They are looking to pick up 1.5 billion (really) this year in refinancing to cover the expected losses for the next 12 months, and give them some breathing room.

Now I do belive CET has some duplicity with PHo and The Quad / Linq. The Quad remodeling and The Linq opening in 2014 seems like these properties will be competing for same market demographic. I could see them dumping PHo given they have no club scene there, and Cosmo across the street catering to the same clientel.

Either way it will be interesting. I could see either company doing a debt for equity swap as well.

 

I always thought The Mirage would be the second to go (after TI) to Phil Ruffin, but with the "East Coast Buyer" reported, I'm going to lay down the Funk and go with the Bellagio. A Mirage and Bellagio sale would leave MGM somewhat isolated on the south strip.

MGM recently issued a ban of any corporate mention of the words City and Center. Murren stated he plans on holding a garage sale to see what he can salvage, and in the same interview channeled his inner Taylor Swift and said that he, would never, ever, ever sell Aria, like ever. Doth he protest too much?

Steve Wynn built TI, Mirage and Bellagio, created the mega Las Vegas resort concept, and more than doubled his money selling the three to MGM a few years after finishing Bellagio. Steve's the guy who does his job. Jim must be the other guy.

When you're down and out...

[YOUTUBE]q-XCmb6t6Zw[/YOUTUBE]

 

The stuff about MGM is true.

It seems likely MGM will be allowed to keep their half of the Borgata and get access to all the money that's in escrow which would help a lot.

The story quoted is Leach regurgitating the Morgan's Group takeover of The Hotel though.

 

$20 Billion of debt exceeds shareholders equity of CZR. Shareholders equity is negative $3 per share. Define crushing?

 

http://quicktake.morningstar.com/stocknet/bonds.aspx?symbol=mgm
http://quicktake.morningstar.com/stocknet/bonds.aspx?symbol=czr

 

See I knew people were going to go to the amount vs equity position first.
Yeah CET portfolio makes their debt levels look way worse than MGM, since their equity positions look way better.

MGM debt levels have maturity coming more frequent than CET. CET has more time to pull a rabbit out of their ass. So in this case, MGM went out and ran a huge tab for City Center some of which is coming due. CET is heavily leveraged in LV and other markets.

I just think MGM has to make an immediate move and with Murrens plan he has been communicating to investors, its likely he makes a move in LV. Which is funny since based on CET debt levels you would think the opposite would be true.

 

I am on the record that the story is over hyped and the property in discussion is Mirage.

 

I'm going to go with Luxor or Monte Carlo...

 

Based on previous published reports, a stake in PH is available for the right investor but I don't think the whole thing is up for sale.MGM is also looking for investors in some of their CityCenter properties. Mirage is the most prolific property up for sale in total and its not the ideal choice for a nightclub group unless they are capable of conceiving a plan that doesn't alienate the existing customer base. But since MGM has more ties to nightclub groups than CET, I would think its one of theirs up for grabs. I am kinda surprised its not Cosmo as theoretically it should be the one up for sale.

 

No it does not.

They are the buyers.

 

Sounds to me like the Mirage.

Being bigger than the Genting purchase is easy (there was no hotel on that land)

Conglomerate is MGM or CET.

CET hotels are a stretch as prestigious, and they are also strategically located, so probably not them.

Mirage is a logical one to sell, because it is in good enough shape still and good location to be attractive to buy, but is just middle of the road in terms of mLife hotel offerings.

Mirage is the only MGM one I'd consider "prestigious" that I can see them selling.

 

I'd be pretty shocked if MGM ever offloaded Bellagio. Despite all of their attempts to position Aria as their top-end property, it's never going to replace Bellagio in terms of public perception. Not to mention, they only own half of Aria, and I can't picture them giving up a high-end property that's 100% theirs to focus on a high-end property where they only take home half the profits.

 

It has to be the Mirage because its an isolated MGM property between Treasure Island and Caesars. Or maybe Caesars is looking to sell Planet Hollywood?

 

MGM certainly has debt. But they also have a major investor reportedly trying to up his stake to 25%. They've been rumored for 2 years to be looking to unload a strip property.

I think Mirage falls into the 'prestigious' category, just because it kind of started the high end hotel phase of vegas.

 

I normally wouldn't chime in as I don't know enough about Vegas to contribute anything much of value. However, there is a Vegas talk show I stream off the Internet that mentioned that the Mandarin Oriental was either being sold or was sold. Can't remember which but I thought I would put it out there for consideration for those who know far more than I about the strip and Vegas in general.

For all I know it may have been bought and sold within the last couple of years and its already happened. I wasn't paying attention to the date the show was taped when I watch it and I know I've been watching both new and older episodes.