Two Way Hard Three | Las Vegas Casino & Design Blog

News this morning that Boyd Gaming will decline their opportunity to purchase the other half of Borgata, currently owned by MGM Resorts Intl. and held in trust. Boyd is the managing partner of Borgata.

Frankly I'm a little surprised - they only had to cough up $250MM and it's not even worth that to them? Clearly the macro trend of the city weights heavily on this decision.

This moves the process along a bit for MGM for whom the asset is tied up in a trust following action by the New Jersey Casino Control Commission.


Read archived comments (8 so far)
October 25, 2010 9:40 AM Posted by Jeff in OKC

Maybe someone can give me a definitive answer; I have read on other sites that the Borgata purchase also requires assumption of debt in the $400-500 million range, as well as the cash that has been offered. I think this would make the total price close to $700 million for 50%., which I don't see as a smart move on Boyd's part.

October 25, 2010 10:30 AM Posted by BigHoss

In the Q3 conference call, Kevin Smith commented that "deleveraging the balance sheet" is "priority one." Sounds like they plan to keep running a conservative ship until things really turn around, ie: not adding any more debt. Though, you're right, it does seem like a relative bargain that would payoff in the long run.

October 25, 2010 11:21 AM Posted by Motoman

BYD shot up while MGM took another dump, so someone likes that decision.

I was a little taken aback by Chuckmonster's pump-n-dump allegation in the podcast concerning MGM's stock offering but the numbers since then seem to kind of back him up....

October 25, 2010 11:28 AM Posted by Jeff Simpson

I am also surprised by Boyd declining its option. I don't know the terms of the Borgata joint venture's debt or Boyd's corporate debt, but my best guess is that by taking control of the whole property the Borgata debt would have no longer counted as separate from Boyd's corporate debt and the change in corporate-level leverage may have triggered some negative action for its corporate debt. A guess, but I do know that the factor was considered almost two years ago (when Boyd considered buying MGM's half of the Borgata at a higher price).

October 25, 2010 3:38 PM Posted by detroit1051

Press of AC says BYD would have had to take on the debt:

April 1, 2011 1:13 PM Posted by Paco

Yes, in addition to the purchase price Boyd would have to assume another $410 million in debt. There are rumors that Lloyd Green can still back out of this deal, so Boyd may get the property for much less. Possibly just for assuming the debt.

April 1, 2011 9:43 PM Posted by Dave

Wow, zombie thread!

And who's Lloyd Green?

April 6, 2011 8:42 PM Posted by Paco

My mistake, I meant
Leonard Green
, the rumored purchaser of MGM's half of Borgata.