Private equity behemoth Blackstone (NYSE:BX) is rumored to be mulling a sale-leaseback transaction involving Star Entertainment Group’s the Star Sydney structured resort.
That bruit surfaced prior to today’s tumble inward shares of the Aussie casino manipulator amid allegations that it facilitated money laundering at its Sydney and Gold Coast. Slide in Star Entertainment gunstock led to $740 zillion inwards evaporated securities industry capitalization.
Regarding the Star Sydney, the manipulator sees an avenue to create value for shareholders by potentially selling a bulk bet inwards the $1.68 1000000000000 locale and leasing backward the remainder. The keep company could live looking to sell a 51 percent involvement inwards the attribute while retaining 49 percent.
We control the potential to unlock time value from our prop assets via a sales agreement and leaseback or similar transaction,” said Star Entertainment CEO Harry Theodore inward an question with The Australian.
Credit Suisse is workings on sale-leaseback leads for the gaming company. Sale-leaseback deals, or SLBs, are unglamourous inwards the industry and often viewed as win-wins for gambling casino operators and tangible estate companies. Through these agreements, a gaming companionship can monetise put down assets, often garnering large, upfront sums of cash in to utilization for anything, including to a greater extent acquisitions, shareholder rewards such as buybacks and dividends, or to come down debt.
Likewise, the tangible land firm that leases the earth backrest to the manipulator gets the do good of long-term renter agreements that often include gradually increasing rates without having to follow financially responsible for edifice enhancements.
Blackstone Logical Partner for Star
For now, Blackstone’s possible involvement inward a sale-leaseback for Star Sydney remains a tip of speculation, not confirmation. However, the buck private equity unwavering has an constituted runway record of involvement in gaming SLBs.
In 2019, Blackstone acquired the belongings assets of the Bellagio on the Las Vegas Strip and leased that locus backwards to MGM Resorts International. A few months later, it took a nonage post inwards a trade with MGM Growth Properties the real estate of the MGM Grand and Mandalay Bay. In July, the buck private equity behemoth proclaimed the purchase of Aria and Vdara on the Strip and that those venues are existence leased back to MGM.
Even with the of late announced sale of the Cosmopolitan to MGM, Blackstone remains 1 of the largest landlords on the Strip.
Another Reason Blackstone/Star Partnership Makes Sense
There’s another angle to a possible Blackstone/Star collaboration. The latter was previously a suer for rival Crown Resorts, which also landed in hot regulatory waters. However, Star withdrew its $6.64 one million million takeover proffer inwards July.
Blackstone owns most 10 percent of Crown shares and Star left wing the door opened to making another adjure for its rival. One thing is for certain, Star’s new regulatory contention notwithstanding, analysts the like the idea of the companionship monetizing its Sydney structured resort.
“We guess the sale and leaseback of the Sydney casino could bring forth $1.25 a share of incremental time value assuming a 5 per cent crest rate, a insurance premium to US REITs precondition the securities industry spatial relation of Aussie casinos,” according to a notation from E&P Financial Group cited past The Australian.