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.
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.
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