NEW YORK (
is not looking to snatch up the other half of the Borgata, denying its right to match an offer
received earlier this month. Does this signal Boyd may be looking to divest its own interest in the Atlantic City casino?
Earlier this month, MGM announced that it got a roughly $250 million offer for its 50% stake. While MGM did not reveal the name of the bidder, reports surfaced last week that Leonard Green was the suitor.
"We give Boyd credit for exercising caution here on increasing its exposure to the Atlantic City market," J.P. Morgan analyst Joseph Greff, wrote in a note. "In fact, Boyd indicated this would have generated an insufficient return on investment."
While Boyd indicated that it remains comfortable with its current position as managing member and 50% owner of Borgata, Greff said he wonders if it will sell its 50% stake as well.
This wouldn't be much of a surprise, as the Atlantic City market continues to flounder. In September, the New Jersey gambling hub reported an 11.6% plunge in gaming revenue to $296.3 million.
Increased competition in Pennsylvania, West Virginia and Delaware, on top of soft consumer spending, has been weighing on Atlantic City.
In an effort to mitigate Atlantic City's declines, New Jersey Governor Chris Christie assumed oversight of the budgeting and finances of the gambling hub. Whether Christie's control will help what was once deemed the "Las Vegas of the East" remains to be seen.
But at least in the near-term, it doesn't look like Atlantic City is holding a strong hand.
Given this, will Boyd divest its 50% stake in Borgata? Take our poll below to learn the consensus of TheStreet
--Written by Jeanine Poggi in New York.
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