In Pennsylvania, Las Vegas Sands Corporation has reportedly reached a deal in principle to offload its Sands Casino Resort Bethlehem to rival casino operator MGM Resorts International for around $1.3 billion. According to a report from The Morning Call newspaper citing two sources with intimate knowledge of the deal, the pair has agreed a price for the Bethlehem property, which offers 300 slots alongside some 200 gaming tables, but will still conduct several weeks of “due diligence” before making a final announcement.
The newspaper reported that its sources called the sale, which would be the biggest deal of its kind since Pennsylvania legalized casino gambling in 2004, “imminent” although it could take up to six months to close as any arrangement would require the approval of the Pennsylvania Gaming Control Board and the payment of a $2.5 million license transfer fee.
The prospect of the Sands Casino Resort Bethlehem being sold first surfaced last week after the venue’s President, Mark Juliano, reportedly sent an e-mail to the 2,500 employees of the Northampton County venue informing them that Las Vegas Sands Corporation had entered into negotiations.
“We have been told today that Sands [Casino Resort] Bethlehem has a potential buyer; it is a sole buyer interested in purchasing the property,” read the short e-mail from Juliano. “The sale is not imminent and there is a lot of work that still needs to be done before a sale is final.”
This was followed soon after by rumors that Las Vegas-based MGM Resorts International was the suitor for the Pennsylvania property, which attracts some nine million visitors a year and is the only casino in the eastern state to additionally feature a 300-room hotel, an outlet mall and a concert venue.
“We believe a Sands [Casino Resort] Bethlehem sale, which would likely include MGM Growth Partners, could also be beneficial for all involved,” Carlo Santarelli, Gaming And Leisure Managing Director for Deutsche Bank Securities wrote in a six-page analysis released on Sunday. “For MGM Resorts International, the transaction would expand a north-east presence that has grown significantly over the past year while MGM Growth Partners potentially benefits from a new rent stream. Las Vegas Sands Corporation sheds an asset [that] has already produced a significant [return on invested capital] and strengthens the capital return potential story.”
Established in 1976 by billionaire by Kirk Kerkorian, MGM Resorts International operates more than 20 casinos around the world including five regional United States properties in the Borgata Hotel Casino And Spa in Atlantic City, Maryland’s MGM National Harbor and the MGM Grand Detroit along with Mississippi’s Gold Strike Casino Resort and Beau Rivage. It is also constructing the $950 million MGM Springfield property in south-central Massachusetts and expects this venue to open for business as soon as next year.
