Boyd Gaming execs mum on possible Strip acquisition plans

Gaming industry analysts asked every question they could Tuesday to get Boyd Gaming Corp. executives to provide some clues as to whether they would pursue any Las Vegas Strip assets.

But Boyd CEO Keith Smith and chief financial officer Josh Hirsberg weren’t budging.

After reporting a satisfying second-quarter earnings report, Smith and Hirsberg deflected merger and acquisition inquiries with replies indicating the company would evaluate any deal based on whether it made sense to the company, whether the asset was on the Strip or not.

Boyd has indicated its desire to return to the Strip. It once owned the historic Stardust before imploding the building and preparing the land for a megaresort to be known as Echelon.

The company sold the land, and it’s being developed by the Genting Group as Resorts World Las Vegas.

Meanwhile, with Eldorado Resorts Inc. making a run at Caesars Entertainment Corp. and likely to divest properties, the prospect of a Boyd deal is in play. But Smith wasn’t ready to commit to pursuing whatever Eldorado sells.

Asked how he would view a prospective Strip opportunity, Smith said the company would evaluate it like any other asset.

“I think we’d look at it like all acquisitions,” he said. “We’ve said in the past on prior calls that we certainly would like to get back on the Las Vegas Strip with an asset at some point in our future. It doesn’t drive us, we don’t think about it day and night, we keep our eyes open for opportunities.”

“We’ll evaluate it like any other opportunity,” he said. “The right asset. The right price. I said earlier we have great confidence in the strength of the Las Vegas market, both short term and long term, so we’d like to be there, but you won’t see us do anything stupid. And being a little late in the economic cycle, we’ll be sensitive to whatever it is we do, not knowing what the future is going to look like.”

Hirsberg added, “As an acquisition that is purely opportunistic comes our way and fits our criteria, that’s when we’ll be interested in it. Otherwise, we’re fine tending to our own business.”

And that’s what the company did during the quarter that ended June 30.

The company reported a 37.2 percent increase in revenue to $846.1 million with growth resulting from revenue generated by newly acquired properties.

New properties produced strong adjusted cash flow and margins in the Las Vegas locals market — Sam’s Town, Orleans, Gold Coast, Suncoast, the Cannery properties and Aliante — which had the highest second-quarter adjusted cash flow since 2005.

Geographically diverse Boyd also had the fifth straight quarter of same-store adjusted cash flow gains in its South and Midwest divisions.

Smith cautioned that a slowdown could be ahead for its downtown Las Vegas properties because of increased construction traffic and access issues from the construction of Derek Stevens’ nearby Circa resort. Smith said long-term, Circa should generate additional traffic for downtown Las Vegas.

Boyd shares on Tuesday closed up $1.07, 4 percent, to $27.94 a share in trading about twice the average volume on the New York Stock Exchange.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.