Boyd Gaming Corporation (“Boyd Gaming”) today announced that it has entered into an agreement to sell its 50% equity interest in Marina District Development Holding Company, LLC, the parent company of Borgata Hotel Casino & Spa in Atlantic City, New Jersey, to MGM Resorts International for
consideration of $900 million, as well as a 50% share of any future property tax settlement benefits received by Borgata.
Boyd Gaming expects to initially receive approximately $600 million in net cash proceeds from the transaction, after deducting its share of Borgata’s currently
outstanding debt. These initial proceeds do not include Boyd Gaming’s potential share of future property tax settlement benefits.
Borgata estimates that it is entitled to property tax refunds totaling $180 million, including amounts due under court decisions rendered in its favor, and estimates for open tax appeals.
A statement from the company said the transaction is an advantage to create value for the existing shareholders of the company, the proceed of which will be channeled toward reducing debts, thereby strenghtening the company balance sheet and accelerating the timeline for reaching the leverage target of four to five times debt to Adjusted EBITDA.
The transaction is however expected to close in the third quarter, subject to the satisfaction of customary closing conditions and the receipt of all required regulatory approvals.
Upon closure of the transaction, MGM will fully own the property and assume oversight of the property’s day-to-day operations.