MGM Resorts completes Borgata deal
The company has completed the €805 million purchase of Boyd Gaming’s 50 percent share of the Borgata in Atlantic City and has transferred the real estate to MGM Growth Properties.
US.- MGM Resorts paid US$589 million in cash for the transaction, after consideration of Borgata’s outstanding €527 million in debt. Boyd Gaming has confirmed its intention to use the proceeds of the sale for “debt reduction and general corporate purposes.”
A portion of this debt was refinanced and assumed by MGM Growth Properties LLC, a publicly traded real estate investment trust (REIT) that has in turn acquired the Borgata property from MGM Resorts. The property has been leased back to a subsidiary of MGM Resorts that will operate the property.
The transaction includes the Borgata casino and hotel and the Water Club hotel next door in the city’s Marina District. Jim Murren, Chairman and CEO of MGM Resorts, said that Borgata is a great addition to their growing presence in the mid-Atlantic and Northeast United States.
“We are excited to welcome the talented Borgata leadership team and employees into MGM Resorts and look forward to serving guests with new and exciting opportunities through our diverse resort offerings, entertainment dominance and market leading loyalty program, M life Rewards,” he added
Tom Ballance, President & COO of Borgata, said: “We welcome MGM Resorts as the new operator and are excited to further utilise its best-in-class brand to continually bring quality experiences to our guests.”
MGM Resorts had been effectively forced to give up control of its original 50 percent interest in the Borgata Hotel Casino and Spa and had put its original 50 percent stake into a fund controlled by a trustee when it pulled out of the Atlantic City market voluntarily in 2009. Five years after being forced to give up control of its interest, the New Jersey Casino Control Commission voted unanimously to allow them to re-enter the Atlantic City casino market. Earlier this year the Casino Control Commission approved the lease agreements needed for the sale that will give MGM Resorts full control of the property.
