MGM Resorts is buying Boyd’s 50 per cent stake in the Borgata Atlantic City, in the US state of New Jersey, for up to $900m, which includes an initial $600m payment with the latter also receiving up to $180m in potential property tax refunds from Atlantic City.
MGM will then sell the real estate to MGM Growth Properties for $1.175bn and lease back and operate the casino.
The Borgata will be added to MGM and MGP’s existing master lease agreement, with the rent payment to MGP increasing by $100m a year. Rent will be 90 per cent fixed, increasing annually at a rate of two per cent until 2022.
The transaction is expected to close in the third quarter of 2016.
Source: Fantini Report
