Monday, May 21, 2007

Bellagio, CityCenter Going Private?

This is a really big deal. I can't imagine that MGM Mirage would want to sell these key assets, but there's a price to everything. It sure would accelerate MGM Mirage's North Strip plans, hmm? From the AP:

BEVERLY HILLS, Calif. (AP) -- The investment arm of billionaire
investor Kirk Kerkorian says it will enter talks to buy MGM
Mirage's Bellagio hotel-casino and City Center properties.
Shares of MGM Mirage soared in aftermarket trading.
Kerkorian's Tracinda Corporation also says in a filing with the
Securities and Exchange Commission that it wants to pursue what it
calls "strategic alternatives" related to its investment in MGM
Mirage.
Tracinda says those alternatives may include a financial
restructuring involving all or significant part of the rest of the
company.
MGM shares jumped more than 11 percent -- or 7 dollars and 22
cents -- to 70 dollars and 40 cents in aftermarket trading.
Posted by THE STRIP PODCAST at 2:43 PM
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1 comments:

Anonymous said...

In general, Wall Street (particularly the institutional investors) value consistency almost as much as profit. Unfortunately with the huge upfront capital needed to build a casino and then the ups and downs of gaming profitability, it makes Wall Street a bit nervous. So a publically held gaming company that is simply a "manager" for a fat (and predictable) annual fee, may actually drive the value up. A private company does not have such concerns and can put up a huge investment that could take years to see a return (either through gaming wins or property value increases). A deal like this doesn't happen often because usually one person doesn't control both sides but since KK does, it might work out.

May 22, 2007 at 8:15 PM

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