Casino news source: Independent IE - http://www.independent.ie
Chips are down for Las Vegas casino buyout
SHARES in the company which owns some of Las Vegas' swankiest casinos reached record highs yesterday amid signs that the $18bn (€13bn) group could be taken over.
Billionaire Kirk Kerkorian said he will consider "alternatives" for his majority stake in MGM Mirage, the group he created out of the MGM film studio.
The 89-year-old Kerkorian, the son of an Armenian immigrant rancher, has bought and sold the Metro-Goldwyn-Mayer movie studio three times since 1970. He founded the MGM Grand casino company in the 1980s and acquired Mirage Resorts in 2000 for $6.4bn.
Tracinda, Kerkorian's holding company, said it intends to negotiate the purchase of two Las Vegas properties, the Bellagio Hotel & Casino, and the CityCenter complex which is under construction.
Tracinda also is studying options including a "financial restructuring" for the rest of the company.
'Everything is on the table," Steven Kent, an analyst at Goldman, Sachs, said in a research note. Options include splitting the company up or turning it into a real estate investment trust, Kent wrote. Shares soared $18.90, or 30pc, in New York trading, as investors speculated that Kerkorian's moves signal the company may be taken over. Buyout firms may be attracted to MGM's real estate and cash flow, analysts said.
Last year, Apollo Management and TPG agreed to purchase Harrah's Entertainment for $17.1bn. Las Vegas real estate prices are soaring, with one property, the New Frontier & Hotel, selling for almost $35m an acre last week.
MGM Mirage owns 760 acres on the Las Vegas Strip and 10 casinos, including the Luxor and Mandalay Bay. The company is building the 66-acre CityCenter, which will include hotels and condominiums, for $7.4bn.
Casinos in Las Vegas reported a record $6.69bn in gambling revenue in 2006, an 11pcincrease from a year earlier, according to the Nevada Gaming Control Board. (Bloomberg) |
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