MGM Mirage Selling 50 Percent Stake in Atlantic City’s Borgata
It was announced this morning by MGM Mirage that an agreement made between MGM Mirage and gaming regulators at New Jersey will permit the company to trade 50 percent of its stakes in Borgata resort, located in Atlantic City.
End of a dispute
A dispute has erupted as to the suitableness of Pansy Ho, Hong Kong-based businesswoman as a joint venture partner of MGM Mirage in Macau. The New Jersey Division of Gaming Enforcement has judged Ms. Pansy Ho as an inapt partner for the company. Now with the settlement made between MGM Mirage and New Jersey gaming regulators, the dispute is expected to reach a much-awaited settlement.
The matter however is still pending hearing, as it has been scheduled for a recent court appearance. The agreement furthermore is yet to be approved by the New Jersey Casino Control Commission, which will hear the issue on the aforementioned date.
30-month sale period
The settlement terms will govern the sale of the stake in Borgata, which include placing the interest of the company in the Borgata in a divestiture trust. The settlement moreover authorizes the sale of the trust property within a period of thirty (30) months.
MGM Mirage will have full rights in directing the trustee to put the trust property up for sale during the first eighteen months, as long as it has already been approved by the Casino Control Commission. If no sale has been completed during that period, the trustee will have the responsibility in putting up for sale the interest of the MGM Mirage in the Borgata and associated leased land within the period of 12 months following the first 18-month term.
The other 50% stake of the Borgata resort is owned by Boyd Gaming Corp. The same company currently operates the resort. The right of refusal on the prospective sale is maintained by the company.
Official statement
Jim Murren, MGM Mirage Chairman and Chief Executive Officer, has released a statement on the subject matter. “We at MGM Mirage maintain our respect for the Division of Gaming Enforcement but we do not necessarily agree with their estimation on our Macau-based partner. In other areas where we operate casinos, regulators have evaluated this matter as well and have concluded on the appropriateness of the relationship.”
Gaming regulators in Nevada and Mississippi have both approved the appropriateness of Pansy Ho as a business partner. She is the daughter of Stanley Ho, a foremost name in Macau casino, and alleged by international law to be involved in organized crime triads in China.
Murren furthermore added that the settlement of this matter is important, especially that the Division of Gaming Enforcement maintains a diverse viewpoint on the issue. According to the CEO of MGM Mirage, the best route would be to pursue the advancement opportunities offered in Macau.
MGM Mirage will no longer have a gaming license in New Jersey, although the divestiture trust will maintain any cash flows coming from the Borgata before conclusion of the sale.
The settlement has governed furthermore that MGM Mirage will be allowed the reapplication of a New Jersey gaming license 30 months after the sale has been completed.
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