100xOdds
100xOdds
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October 2nd, 2016 at 9:23:53 AM permalink
in 2010, MGM left NJ instead of severing ties to a Macau businessman. but they couldn't find a buyer for their 50% share of Borgata.
in 2014, NJ let them back in.

in 2016, they bought out Boyd for the other 50% for $600M cash and assuming $300M in debt.
$900M total.

so why did Boyd sell out?
$900M sounds paltry especially since the Borgata makes that much profit per year.
and the Borgata has the reputation of being the best casino in AC.

So why sell?


edit:
mods- can u fix my spelling mistake in the title?
should be TO instead of TRO.
thx
Last edited by: 100xOdds on Oct 2, 2016
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onenickelmiracle
onenickelmiracle
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October 2nd, 2016 at 10:15:14 AM permalink
All the other articles state they wanted to shore down debt. If they accepted 900 million, assume they would need 900 million or more to get rid of MGM as a partner, and assume they couldn't.
I am a robot.
Paradigm
Paradigm
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October 2nd, 2016 at 10:29:03 AM permalink
They ended up buying Cannery and Aliante just before and just after selling the 50% of Borgata. Perhaps they wanted a bigger presence in the Vegas Locals market in place of the large single property investment in AC.

As onenickel indicated, likely would have taken at least $900M to own Borgata outright...that is a pretty big investment in a single property for Boyd's size. Recall they went into that project as 50/50 partners for a total project cost of $1.1B, it was their biggest project to date. So take a $350M gain and move on or invest another $900M+ to buy MGM out (which clearly was available when MGM had their 50% up for sale). Doesn't seem like a bad decision to sell.
Casinodepositor
Casinodepositor
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October 7th, 2016 at 8:24:55 PM permalink
Boyd would probably need more money to finance their debt or something. It may be true that they are making money on borgata but that doesn't mean it's enough for them. You know business set a target profit on every business they put and if that particular business always falls short even it's making money they would just sell that one and acquire new one.
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