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MGM Resorts pulls out of talks to buy Wynn Resorts' Boston casino

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MGM Resorts pulls out of talks to buy Wynn Resorts' Boston casino

MGM Resorts International on May 21 withdrew from talks to acquire Wynn Resorts Ltd.'s Encore Boston Harbor resort in Massachusetts, citing shareholder anxiety.

The decision comes days after the Las Vegas hotel and casino operators confirmed that they are in preliminary talks over the sale of Wynn's casino that is currently under development in Everett, north of Boston.

In an emailed statement to S&P Global Market Intelligence, MGM said: "We have noted the anxiety raised by various stakeholders regarding a transaction and this troubles us at MGM."

The company, which already runs MGM Springfield in the state, said it is "committed to our Springfield community and proud of what we have accomplished including thousands of jobs and millions of dollars of revenue for small businesses in the area."

"We only wish to have a positive impact on communities in which we operate. We think the best course of action is to discontinue discussions concerning this opportunity," MGM added.

Meanwhile, Wynn Resorts also confirmed that it abandoned talks with MGM. "After careful consideration we have agreed to cease discussions with MGM Resorts," the company told Market Intelligence in a statement.

"At times, world class assets attract the attention of others and our board takes seriously its fiduciary duty to review such interest… We remain committed to opening and operating Encore Boston Harbor as only Wynn Resorts is able to do," Wynn added.

The decision comes as Massachusetts Governor Charlie Baker described the potential sale as a "nerve-wracking time" for Everett and Springfield communities, The Boston Herald reported May 20.

Baker reportedly noted that 5,800 new jobs are at stake in Everett if the deal pushes ahead.

The newspaper added that Springfield Mayor Domenic Sarno is also "hard-nosed" in his negotiations with MGM regarding annual payments of millions of dollars in their community host agreement.

The city host agreement between MGM and the city of Springfield called for annual payments for the operation of the MGM Springfield, in addition to prepayments from 2015 to 2017 and other payments in connection to the Springfield casino's development and operation.

"Nothing could occur without the OK from myself and the Gaming Commission," Sarno reportedly said, referring to the Encore Boston Harbor deal.

The Encore Boston Harbor, which is expected to open in June, has a capital investment of $2.5 billion and is expected to create 4,000 permanent jobs.

Under Wynn's host agreement with the city of Everett, the company is expected to pay $30 million dollars in community enhancement fee to the city following the retention of its gaming license to operate in Everett. Wynn also committed to paying an annual community impact fee of $5 million to Everett when the Encore Boston Harbor commences operation.

The Massachusetts Gaming Commission retained Wynn's gaming license April 30 after ending its yearlong probe into the company's handling of sexual misconduct allegations against its former CEO Steve Wynn. Wynn was fined $35 million at the conclusion of the investigation.