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Kerkorian Trying To Buy Bellagio, CityCenter from Himself

By Chuckmonster on Monday, 21st May 2007 5:24pm
  » filed under Mergers & Acquisitions  comments: 2


Let us know if you can figure this one out. Kirk Kerkorian's Tracinda Corp, an investment arm of his monolitic empire is enterting talks with MGM Mirage - which is partly owned by Tracinda and Kerkorian, to purchase Bellagio and City Center.

According to CNN Money, Tracinda owns 55.9% of MGM Mirage, 5% less than they tried to snag earlier this year.

Is this a slowly moving privatization of MGM Mirage? It's a popular theme amongst the big casino companies these days... so it sure is possible. How the world turns.



Comments & Discussion:

I guess since his offer to buy the Chrysler Group fell through, he's go to throw the money he made off of liquidating his stake in GM somewhere. If this deal goes through, things on the Strip will get interesting in the near future. The redevelopment of Circus Circus could get fast tracked and really jumpstart the rebirth of the North Strip.

The value of both the Bellagio and CityCenter is said to be close to the value (at the time of the market close today) of the 158.8 million shares of MGM-Mirage Tracinda owns (in afterhours trading, shares of MGM-Mirage are up over $10 from the close this afternoon of $62.95).

If Harrah's can go private, there's always a chance MGM-Mirage could follow suit. Whether the Bellagio and CityCenter are part of MGM-Mirage remains to be seen.

if anyone saw the interview with the CEO of harrah's last week on Mad Money on CNBC, he said he spends about 20% of his time doing public-company stuff, like preparing statements for shareholders & worrying about conference calls & meeting quarterly guidance. as a private company, they don't have to worry about ALWAYS trying to grow the company, but can improve existing properties & other value ideas.

I think kerkorian is doing exactly that with his 2 best properties: bellagio & CityCenter. by having them under tracinda, he will have that private company "freedom" to do with them as he wishes, and then can leave the other mgm properties under the Mirage brand as a public company, and maybe eventually take them all private under tracinda.

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