American tycoon investor Kirk Kerkorian announced his plans to purchase two Las Vegas Casinos owned and operated by MGM Mirage: the Bellagio and the CityCenter, still under construction. Any acquisition would be done through Tracinda, Kerkorian’s investment company, which already owns 56 percent of MGM Mirage.
Tracinda also informed that it intends to pursue “strategic alternatives” related to its share in MGM Mirage. “This will put them in play,” Matt Sodl, an investment banker with Los Angeles-based Innovation Capital LLC said. “It's a very aggressive move.”
MGM, which owns ten casinos and 760 acres on the Las Vegas Strip, said its board would consider Kerkorian’s proposal after the company’s annual shareholders’ meeting and respond in due course. MGM shares went up $15.25, or 24 percent to $79.20 after Kerkorian’s announcement.
The company’s net income grew 46 percent in 2006, reaching $648 million, led by a 17 percent increase in revenue. Its share price has gained during eight straight years and grew 9.8 percent in 2007 before this week’s announcement.
The Bellagio and CityCenter sites Kerkorian is planning on buying are together valued at approximately $10 billion.