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Speculation Over Casino Buy-Out in MGM Mirage

As of May 23, 2007, the stocks in some companies which are the owners of the biggest gambling casinos in Las Vegas improved, despite the fact that the $18 Billion worth MGM Mirage could be taken over by rival companies.

Billionaire casino shareholder, Kirk Kerkorian, commented that he will review his options for his large stake in the MGM Mirage, the casino organization that he created from the MGM film studio.

Kirk Kerkorian, an 89 year old Billionaire and the son of an Armenian immigrant rancher, has bought and sold the MGM Movie Company 3 times since the 1970's. He made the MGM Grand Casino in the 1980's and bought the Mirage Resorts in 2000 for $6.4 Billion.

Kirk Kerkorian's holding company, Tracinda, commented that they are also intent on negotiating the buy-out of 2 other Las Vegas properties, the Bellagio Hotel and Casino and the CityCenter Complex, which is still under development.

In addition, they are studying their options, including financial reorganization for the company. An analyst from Goldman, Sachs Steven Kent said that everything is displayed out in the open.

Shares improved $18.90 or 30 pc on the NYSE, as most investors speculated that Kerkorian's actions signal a takeover.

Buyout firms may be attracted to the real estate prospects of MGM and its cash reserves. Just last year, Apollo Management and the TPG closed a deal to buy Harrah's Entertainment for $17.1 Billion.

The prices of real estate in Las Vegas are increasing with the New Frontier and Hotel property selling for about $35 million per acre.

The MGM Mirage Organization currently owns 760 acres on the Las Vegas strip and the 10 casino facilities like Luxor and Mandalay Bay.

The company is currently constructing the 66 acre CityCenter which will feature hotels and condominiums worth $7.4 Billion.


17 June 2007
News Submitted by:
Jessica Kellerman

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