Boyd sells 50% stake in Borgata to MGM
Boyd Gaming has entered a definitive agreement to sell its 50% equity interest in Marina Development Holding Company, the parent company of New Jersey land-based facility Borgata Hotel Casino and Spa, to MGM Resorts International for $900 million (€808.8 million).
In a statement confirming the deal, which also includes a 50% share of all future property tax settlement benefits received by Borgata, Boyd said it expects to initially receive approximately $600 million in net cash proceeds from the transaction, after deducting its share of the current debt for the Atlantic City facility.
The initial proceeds do not include Boyd’s potential share of future property tax settlement benefits.
Borgata has estimated that it is entitled to property tax refunds of $180 million, which includes amounts due through court decision in its favour, and estimates for open tax appeals,
Subject to customary closing conditions and regulatory approval, the transaction is expected to close in the third quarter of this year.
“Borgata is the premier resort in Atlantic City and a great addition to our growing presence in the Northeast,” MGM Resorts chairman and chief executive, Jim Murren, said.
“While the market continues to experience challenges, Borgata has outperformed and differentiated itself as the undisputed leader in the city.
“Our decade-long partnership with Boyd Gaming has been a great one, and Borgata's talented employee base will complement and strengthen our more than 60,000-member worldwide MGM Resorts team.”
Keith Smith, president and chief executive of Boyd, added: “The development and opening of Borgata in 2003 was an important step in the evolution and growth of Boyd Gaming.
“Under our leadership, Borgata firmly established itself as the East Coast's most popular and successful entertainment resort throughout the last 13 years.
“While we are pleased with the performance of this property, this transaction is an attractive opportunity to immediately unlock significant value for our shareholders.
“We intend to use the proceeds to reduce debt, further strengthening our balance sheet and accelerating the timeline for reaching our leverage target of four to five times debt to adjusted earnings before interest, tax, depreciation and amortisation.”
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