Blackstone Lavishes ,000 Bonuses upon Cosmopolitan Staffers
Talk about a parting gift. Blackstone (NYSE:BX) will soon cede operational control of the Cosmopolitan Las Vegas to MGM Resorts International (NYSE:MGM), but the private equity company is doling out $5,000 bonuses to the integrated resorts 5,400 employees.
At an event for staffers — also known as CoStars — Wednesday, President and CEO Bill McBeath announced the cash awards while also rewarding two workers with vacations to San Diego and Hawaii.
An exact date for MGM taking control of the Cosmopolitan hasn’t been revealed, but the casino operator said on its recent first-quarter earnings conference it could happen as soon as next month.
MGM announced last September it’s paying $1.6 billion to Blackstone for Cosmopolitan’s operating rights. The private equity will continue to have some involvement in the venue via real estate. A real estate consortium consisting of the Cherng Family Trust, Stonepeak Partners, and Blackstone Real Estate Income Trust (BREIT) is paying approximately $4 billion for the property assets.
Blackstone Won Big on Cosmopolitan
Blackstone acquired Cosmopolitan for $1.74 billion from Deutsche Bank in 2014 when the German banking giant needed to raise cash.
Deutsche Bank took control of the casino-resort from developer Ian Bruce Eichner after he defaulted. The bank then spent $4 billion to spruce up the property.
Blackstone implemented significant operational changes and invested over $500 million into the property to renovate nearly 3,000 guest rooms, build 67 new rooms and suites, enhance the food and beverage offerings and dramatically improve the gaming amenities and common areas,” according to the investment firm.
So Blackstone put $2.24 billion into the Strip venue and parted with it for $5.65 billion, meaning it more than doubled its investment and confirming it can easily afford the $27 million tab for the bonuses to employees.
Blackstone Gaming Ties Run Deep
Blackstone is one of the largest investment managers in the world with $915 billion in assets under management, according to its web site. That includes $298 billion in real estate and $268 billion in private equity — two sleeves where the company maintains gaming exposure.
With BREIT getting a stake in the Cosmopolitan’s real estate assets, that Blackstone affiliate has interests in some of the most iconic Strip venues. BREIT is also MGM’s landlord at Bellagio and owns minority stakes in MGM Grand and Mandalay Bay.
The private equity company is in the midst of acquiring Australia’s Crown Resorts and is mentioned in rumors involving Crown rival Start Entertainment.
Blackstone controls gaming assets in other regions and the firm is often mentioned in industry consolidation speculation, but its last major deal in the space is the Cosmopolitan sale.
The post Blackstone Lavishes $5,000 Bonuses upon Cosmopolitan Staffers appeared first on Casino.org.