Resorts M, which cost $1 billion, was essentially acquired by Penn National Gaming, which acquired $860 million in debt from the property for $235 million. MGM Resorts International has sold a 50% stake in Atlantic City’s Borgata to an as-yet unnamed buyer, which is nearly half of what analysts expected to be $250 million. With a budget of $8.5 billion, Citi Center’s shares are worth $2.65 billion. That means a 50% stake in MGM Resorts is worth $1.325 billion.
Apologizing to Harry Belafonte, the question is: “How low can we go?” It’s clear that the recession and declining profits have reduced the value of casinos. Penn National has essentially recovered the debt of Resorts M at 23 cents per dollar and will wait for Las Vegas to recover.”We see this deal as something that Penn can’t let go of,” said Morgan Joseph gaming analyst Justin Sebastiano.
MGM Resorts may become a market for buyers as companies such as MGM Resorts ($13 billion in long-term debt) and Harrer Entertainment ($19 billion) deal with liquidity issues. MGM Resorts officials said that none of their properties are for sale. But never say never. The Borgata deal is the heart of MGM Resorts’ debt repayment plan. The casino operator is counting on $250 million. Another $114 million in trust will go to the company once the sale is completed.
Boyd Gaming Corp. has a priority right to decline the deal. FBR Capital gaming analyst Jane Pedreira told Press of Atlantic City that she did not believe the casino operator would accept the offer because Boyd did not want to increase its market exposure. Now that the Atlantic City is on its way, MGM Resorts should be happy that it has found a buyer. On the same day that the deal was announced, Atlantic City saw its game revenue fall for the 25th straight month, with a 11.6% decline in September. Borgata’s gaming income dropped 16.1 percent in the month. The casino’s income dropped 7.7 percent in the first nine months of 2010. 에볼루션 바카라사이트
Andrew Janet, a game analyst at Deutsche Bank, said the numbers will continue to fall. The Sugar House Casino in Philadelphia opened and slot machines started in April on New York’s Sioux Race Track. Last month, the troubled resort Atlantic City sold to gaming veteran Dennis Gomes for $35 million, the lowest price ever paid for a New Jersey casino. Gomes plans to leverage HBO’s “Boardwalk Empire” to run the property under a roaring 20s theme.