From Wall Street Journal
May 21, 2007 4:39 p.m. EDT
Tracinda to Enter Into Talks
With MGM to Acquire Bellagio
By DENISE JIA
May 21, 2007 4:39 p.m.
Billionaire investor Kirk Kerkorian's Tracinda Corp. announced Monday that it intends to enter into negotiations with MGM Mirage to purchase MGM's Bellagio Hotel and Casino and City Center properties.
In a filing with the Securities and Exchange Commission, Tracinda said it also wishes to pursue strategic alternatives with respect to its investment in the world's second-largest casino operator, which may include financial restructuring transactions involving all or a substantial portion of the remainder of the company.
Tracinda currently owns 158.8 million shares, or a 56% stake in the Las Vegas-based company, according to the SEC filing.
Tracinda said it has made no decision with respect to any such restructuring transactions and reserves the right not to engage in or approve any transaction.
Shares of the company closed Monday at $62.89.
Updated by Hunter / Tuesday Evening: In an interview with Steve Friess, Bill Weidner from Las Vegas Sands indicated that his company might be interested in The Mirage and Treasure Island if MGM Mirage's properties were to be sold off individually.
Ok - this is getting a bit out of hand. Now, Weidner has actually expressed interest in those two properties in the past. I don't have a link but when the MGM/Mandalay deal was going through, everyone wondered if the FTC would require an asset sale to complete the purchase (they did not in the end). It was at that time he mentioned that LVS would be interested in buying The Mirage and/or TI to include with their portfolio. We know how that story ended.
Of course LVS is interested in The Mirage and TI - and not just a close approximation - these are places that perform very well and have a long established record. I was at The Mirage earlier today for dinner and despite it being a Tuesday, it was quite busy and doing well with occupancy. LVS would do well to score either property but it is so extremely unlikely that there's no point discussing it. Kerkorian's motivations are unknown but it seems more likely that instead of trying to raise cash through selling properties, he's either making a first step toward an LBO for MGM Mirage or it is an attempt to impose a valuation on the company that is closer in line to what he can see as MGM Mirage's rightful place in the market. The latter would be a particularly shrewd move and U'I'm sure we we will discuss these motivations more as we learn more.