MGM Resorts International is placing a US$900 million bet on Atlantic City. The company, which owns a 50% stake in Borgata Hotel Casino & Spa, is purchasing Boyd Gaming Corp.’s 50% stake for a total of US$900 million.
MGM plans to sell Borgata’s real estate assets to MGM Growth Properties (MGP), the real estate investment trust, which was spun off from Las Vegas-based MGM and went public in April. In turn, MGP will lease the property back to a subsidiary of MGM Resorts; a subsidiary of MGM Resorts will operate the hotel.
The property might be the most successful in Atlantic City, according to Travel Market Report. Four of the 12 casinos in the city closed in 2014, although the closures boosted the remaining eight casinos.
Boyd has operated Borgata since the hotel opened in 2003.
MGM Resorts will pay about US$600 million for Boyd Gaming’s 50% interest after consideration of Borgata’s outstanding debt of approximately US$600 million, which MGM Resorts will assume and refinance. For the 12 months ended March 31, Borgata reported US$812 million in net revenue and US$212 million in adjusted EBITDA, according to Travel Market Report.