Boyd Passes On Borgata
Boyd Gaming has turned down an option to purchase a remaining 50 percent stake in the Borgata Hotel Casino & Spa in Atlantic City, N.J., from MGM Resorts International.
Citing concerns that a full purchase wouldn’t provide adequate earnings for shareholders, Boyd said it prefers to remain partial owner of the property. MGM is reportedly in talks with an unknown bidder to sell the stake for $250 million.
“Given other opportunities and our current focus on de-leveraging our balance sheet, the current offer would not provide a sufficient return on investment for our shareholders,” Boyd said in a statement. “Despite this decision, we are confident in the future of Borgata. The property represents a major investment by Boyd Gaming, and it has delivered substantial value for our shareholders.
“We remain comfortable with our current position as managing member and 50 percent owner of Borgata, the region’s premier destination resort,” Boyd said.
In a recent earnings call, the company reported its profits fell 11 percent to $5.6 million in the third quarter, compared with $6.3 million in 3Q 2009. Boyd noted costs and expenses rose from $389.5 million to $540.9 million during the same period.
MGM has been attempting to bow out of its Borgata holdings for some time after the New Jersey Division of Gaming Enforcement raised issue with the company’s joint-venture casino in Macau that is suspected of ties to Chinese organized crime.