MGM will soon be the sole owner of the Borgata.
Boyd Gaming and MGM Resorts International, co-owners of Borgata parent company Marina District Development Holding Company, announced late yesterday they had entered into an agreement for Boyd to sell its 50 percent stake to MGM for $900 million. Boyd will also get a 50 percent share of any property tax rebates.
“The consistent success of Borgata is a tribute to the entire Borgata team, as they have continued to outperform an evolving and challenging Atlantic City market,” Boyd president and CEO Keith Smith said in a release. “We thank them for their tremendous contributions to Borgata and Boyd Gaming, and we wish them continued success as they join the MGM team.”
Following the acquisition of Boyd’s share in Borgata, MGM Growth Properties will acquire the property from MGM Resorts International and lease it back to an MGM subsidiary. MGM spun off the real estate investment trust in April; it is the majority owner.
“Borgata is the premier resort in Atlantic City and a great addition to our growing presence in the Northeast,” MGM Resorts CEO and chairman Jim Murren said in a statement. “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.”
MGM had once planned the MGM Grand Atlantic City for the space between the Borgata and nearby Harrah’s. But the late-2000s recession and the collapse of the gambling market in Atlantic City derailed those plans. Now Atlantic City will soon have its own MGM casino after all.
The purchase will be financed with cash on hand, borrowed money and “the issuance of operating partnership units to a subsidiary of MGM Resorts, based upon MGP’s closing price of $23.03 as of May 27, 2016.” The deal is expected to close in the third quarter of this year.
MGM also owns 10 casinos in Las Vegas, as well as several others in the U.S. and abroad.
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