Jefferies Comments On Boyd Gaming Following Sale Of Dania Jai-Alai To Dania Entertainment Center

Before the open on May 2, Boyd Gaming BYD announced that the company has entered into a definitive agreement to sell the assets of Dania Jai-Alai for $80M to Dania Entertainment Center, LLC. Dania Jai-Alai is a pari-mutuel facility located near the Fort Lauderdale International Airport and the Broward County Convention Center. Boyd Gaming had purchased the Dania Jai-Alai assets in May 2006 for about $152.5 million and subsequently wrote down the intangible license rights, property and equipment by approximately $84.0 million in February 2008 after deciding to postpone the redevelopment of the facility due to several factors. Jefferies believes Boyd Gaming's agreement to unload the Dania Jai-Alai assets makes sense given our belief that the facility is not aligned with BYD's portfolio and, more importantly, is not a major EBITDA generator for the operator. Jefferies expects that the incremental cash flow from the asset sale could be otherwise redeployed for higher ROI activities, including the development or acquisition of an additional gaming asset or the purchase of the remaining 50% interest in Borgata. BYD closed Monday at $8.92