Boyd Gaming selling its stake in the Borgata to MGM

Wayne Parry / AP

In this June 26, 2013, photo, the Borgata Hotel Casino & Spa is seen in Atlantic City, N.J., with the nearby Water Club reflected in its gold glass facade.

Boyd Gaming Corp. is selling its 50 percent interest in the Borgata casino in Atlantic City to MGM Resorts International, the companies announced today.

The $900 million deal will put the New Jersey casino entirely in the control of MGM Resorts, which already owns the other half.

But the corporate maneuvers don’t end there.

MGM Resorts said in a statement that once the transaction closes, its new real estate investment trust, MGM Growth Properties LLC, will acquire Borgata’s real estate. MGM Resorts will then lease back and operate the casino.

MGM Resorts said it will pay about $600 million for Boyd’s interest and will also assume and refinance the casino’s outstanding debt. MGM will sell the real estate to MGM Growth Properties for about $1.18 billion, according to the statement.

Borgata is considered a market leader in struggling Atlantic City, where four of 12 casinos closed in 2014. Over the year that ended March 31, the casino reported $812 million in net revenue and $212 million in adjusted earnings before interest, taxes, depreciation and amortization.

MGM Resorts CEO Jim Murren called Borgata Atlantic City’s “premier resort” and said it was a great addition to the company’s growing presence in the Northeast.

“While the market continues to experience challenges, Borgata has outperformed and differentiated itself as the undisputed leader in the city,” Murren said in the company statement.

He said MGM Resorts’ partnership with Boyd was “a great one” and looked forward to bringing his company’s loyalty program, M Life, to Borgata.

In a separate statement, Boyd CEO Keith Smith said Borgata’s debut in 2003 was “an important step” for his company’s evolution and growth.

“Under our leadership, Borgata firmly established itself as the East Coast’s most popular and successful entertainment resort throughout the last 13 years,” Smith said. “While we are pleased with the performance of this property, this transaction is an attractive opportunity to immediately unlock significant value for our shareholders.”

Smith said Boyd planned to use the proceeds of the sale to reduce debt. The deal is expected to close in the third quarter this year, pending approval from regulators and “other customary closing conditions,” according to MGM Resorts.