The Los Angeles private equity firm Leonard Green & Partners LP has bid 0 million for MGM Resorts’ 50 percent interest in Atlantic City’s Borgata Hotel & Casino. The company would also assume half of the Borgata’s 5 million in debt.
Boyd Gaming Corp., the operator and half-owner of Borgata, had the right to match Leonard Green’s bid. However, in a one-sentence press release on October 25, Boyd announced it will not exercise that right.
MGM bowed out of the nation’s second-largest gaming market when the New Jersey Casino Control Commission questioned its association with investor Pansy Ho, daughter of legendary Chinese casino mogul Stanley Ho. The elder Ho is alleged to have ties to organized crime in Macau.
According to Bloomberg News, Leonard Green, founded in 1989, manages about $9 billion and owns part of fitness club operator Equinox, Whole Foods Market Inc. and the retail chain the Sports Authority.
The firm previously made an unsuccessful play for the M Resort Spa Casino in Las Vegas, Bloomberg reported. It lost to Penn National Gaming, which outbid rivals by about $10 million.
Without confirming the name of the suitor, MGM Resorts acknowledged that it would take a $128 million loss on Borgata if the sale goes through. The loss reflects MGM’s investment in the casino, the company said. MGM estimates Borgata’s current value at $1.35 billion.
Borgata cost $1.1 billion in 2003. Since then, it has undertaken two major expansions totaling about $600 million. That includes the $400 million Water Club hotel, which opened in 2007.