In a move to diversify its holding outside gaming and Las Vegas, MGM Resorts International has acquired a 50% stake in lifestyle owner-operator Sydell Group, which operates brands such as NoMad and Line hotels, according to a Wall Street Journal report. MGM declined to share the price and terms of the deal that will help protect it against an economic downturn and better connect it to a younger audience.
Private equity investor Ron Burkle sold a 50% stake in the company to MGM, people familiar with the deal told The Journal. Sydell Chief Executive Andrew Zobler, real estate investment firm Square Mile Capital and other partners own the rest of the hotel company with 16 hotels open or under construction in major markets from New York and Los Angeles to London. Burkle, head of Yucaipa Cos., continues to own a number of Sydell properties.
Zobler, who reportedly will remain Sydell’s CEO, said the deal with MGM will give his company more clout when bargaining for commissions with online travel agents and will offer access to a broader distribution network.
In 2018, Sydell and MGM opened a 293-room NoMad Hotel on the top four floors of the Park MGM in Las Vegas. The new partnership is expected to create more crossover opportunities, including the potential for additional joint properties and a shared loyalty points program, people briefed on the matter said.