Sunday, October 17, 2010

MGM Sells Borgata

MGM Resorts International is close to selling their 50% stake of the Borgata in Atlantic City. The company announced it had received an offer from an unnamed source, and is now waiting on approval from the other half of the Borgata ownership, Boyd Gaming.

MGM will receive about $250 million cash in the deal, which calls for the buyer to take over half of the Borgata's $875 million debt load. So essentially the deal is worth $687.5 million which would value the whole Borgata property at $1.375 billion.

Selling the Borgata allows MGM to chip away at their massive debt. It also means they will be out of New Jersey completely which will give them more freedom to operate in Macau. While the Borgata is a great property and the best thing in Atlantic City, MGM is probably happy to sell given the circumstances.

Source: MGM Press Release.