MGM Resorts wants more time to sell Borgata stake

ATLANTIC CITY, New Jersey -- MGM Resorts International is seeking additional time to sell its 50 percent stake in Atlantic City's Borgata Hotel Casino and Spa as part of a settlement agreement reached with New Jersey gaming authorities for the company to divest itself from the East Coast casino market.

In a statement Friday, the company said it wants to add 18 months to the agreement that was reached in March 2010. The extra time would give MGM Resorts 48 months to sell its Borgata holdings. Boyd Gaming Corp. owns the other half of the Borgata and operates the hotel-casino for the joint venture.

The New Jersey Casino Control Commission plans an Aug. 8 hearing on the proposed amendment.

One gaming analyst speculated that the extension request means a deal with a Los Angeles-based private equity firm to purchase the MGM Resort's stake had collapsed.

"This agreement confirms what the market has suspected for some time: the initial interest received in the stake was weak and the sale will not happen any time soon," KDP Investment Advisors gaming analyst Barbara Cappaert said in a note to investors.

Under the amendment, during the first 36 months -- or until March 24, 2013 -- MGM Resorts, through a trustee, has the right to sell the Borgata stake. If a sale is not concluded by then, the trustee would be responsible for selling the company's interest in the Borgata within a year.

All other material terms of the settlement agreement were unchanged.

MGM Resorts agreed to depart Atlantic City after New Jersey gaming authorities expressed discomfort with the company's relationship with Hong Kong businesswoman Pansy Ho. At the time, MGM Resorts and Ho, the daughter of Hong Kong billionaire Stanley Ho, each owned 50 percent of the MGM Grand Macau.

Since the agreement with New Jersey was reached, a 20 percent ownership stake in the hotel-casino was listed on the Hong Kong Stock Exchange. The initial public offering raised $1.4 billion. MGM Resorts now owns 51 percent of the MGM Grand Macau. Pansy Ho owns 29 percent.

The New Jersey Division of Gaming Enforcement deemed her an unsuitable business partner, even though Nevada and Mississippi regulators signed off on her suitability.