April 20, 2016 / 7:25 PM / 2 years ago

Boyd Gaming nears deal to buy Cannery Casino Resorts: sources

(Reuters) - Casino operator Boyd Gaming Corp is close to an agreement to buy Cannery Casino Resorts LLC, in a deal that will value the privately held U.S. company at between $225 million and $240 million, according to people familiar with the matter.

One of Cannery Casino Resorts’ two Las Vegas locations would give Boyd a strong foothold in the fast-growing north area of the city, which is emerging as a hub for technology start-ups, attracting affluent professionals with money to gamble.

An agreement between Boyd and Cannery Casino Resorts could come within weeks, the people said, asking not to be named because the matter was private.

Representatives for the Cannery, Crown Resorts and Boyd could not immediately be reached for comment. An Oaktree representative declined to comment.

Established in 2001, Cannery Casino Resorts is owned by privately-held casino operator Millennium Gaming Inc, investment Oaktree Capital Management, and a subsidiary of Australian gaming company Crown Resorts Ltd.

In December, Cannery Casino Resorts agreed to sell The Meadows Racetrack and Casino located in a suburb of Pittsburgh to Gaming and Leisure Properties Inc for $440 million.

The sale of the Pennsylvania property simplified Cannery’s capital structure, paving the way for a potential sale of the Nevada properties.

Founded in 1975 by Bill Boyd, Boyd Gaming, which has a market capitalization of $2.4 billion, has grown into an owner and operator of 22 casino and hotel properties in eight U.S. states. Boyd’s portfolio includes three casinos in downtown Las Vegas and six properties in greater Las Vegas.

Consolidation in the casino industry has been picking up. The Palms Casino Resort, owned by private equity firms TPG Capital LP and Leonard Green & Partners LP, has also been exploring a sale, according to people familiar with the matter.

A Palms’ representative said the company does not address rumor or speculation.

On Tuesday, real estate investment trust MGM Growth Properties LLC, a portfolio of casino resort properties carved out of MGM Resorts International Inc raised $1.05 billion in an initial public offering.

Reporting by Mike Stone in New York; Editing by Frances Kerry

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