"Dubai agreed to pay $5 billion for a 9.5 percent stake in MGM Mirage and half of the Las Vegas casino owner's biggest development, bringing billionaire shareholder Kirk Kerkorian his biggest investment in the company."
This is huge news. There is a more in-depth report in the 8/22 Wall Street Journal for subscribers. The news troubles me, but Lanni and Murren haven't disappointed yet,
Dubai World To Buy 9.5% of MGM Mirage
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And so it begins.
I've heard a lot of stuff I can't share in the past month that's made me concerned for Las Vegas' long-term futures, and this only adds more concern. Mostly because Dubai is seen as the corporate arm of the middle east, and that makes middle America nervous.
The best thing MGM-Mirage can do is downplay this. Bring it up at the shareholder meeting and spin away there, then move on.
on August 22, 2007 6:25 AMHunter - Could you expand on why this troubles you?
Mike - Same with you. I don't see this being a terrible thing?
Mike_ch, this excerpt from the WSJ story makes me think all is not rosy at CityCenter. This $8 Billion project is only valued at $5.4 Billion?? What am I missing?
"The construction cost of CityCenter, which will be a venture with Dubai World, was estimated at $7.4 billion, with more than $2 billion of that cost offset with the presumed proceeds from future condo sales. Dubai World was able to buy a 50% stake in the project for $2.7 billion after the banks advising both MGM Mirage and Dubai World valued the project at $5.4 billion using a formula that took into account remaining costs and future profits, MGM Mirage officials said."
on August 22, 2007 7:25 AMDetroit, those numbers add up. They made the deal based on the $7.4 billion figure, minus $2 billion in condo sales, leaving $5.4 billion, then split that in half between MGM and Dubai. Interesting that Dubai recently bought Barney's which is building a store at Palazzo.
on August 22, 2007 10:35 AMBrian, that was my comment. Don't blame Hunter for my rantings. Imo, Dubai symbolizes everything the Islamic fundamentalists oppose. One day, the fundamentalists are going to try to bring Dubai back into the fold whether it's in Dubai itself or in Vegas. I hope I'm wrong.
on August 22, 2007 12:44 PMMGM was up almost 9% today.
More operating details on CityCenter:
http://biz.yahoo.com/ap/070822/mgm_mirage_dubai.html?.v=9
on August 22, 2007 1:48 PMLanni had an interview with KLAS although they felt fit to just air one sentence of what he said and then summarize everything else.
Basically, let's pay down debt so that we can afford to build more stuff sooner!
on August 22, 2007 4:15 PMFreedom fries!!!
I was worried about possible comments here after I read this news in the LA Times yesterday. Dubai is fast becoming one of the most economically powerful cities in the country, building some of the most impressive office towers, aprtments buildings and hotels in the world. To me, Dubai World's desire to have a share in the Las Vegas market makes complete sense. And if Middle America can't seperate Dubai from terrorism and Islamic fundamentalism, and choose not to visit Las Vegas because of it... Hmmm... Their loss I guess.
I wonder if this infusion of cash from Dubai World had anything to do with MGM settling the union contract dispute?
on August 25, 2007 10:40 AMMark D, you're right on the money:
http://www.lasvegassun.com/sunbin/stories/sun/2007/aug/26/566662277.html
on August 26, 2007 5:58 AMMore Dubai investment, this time at "CityCenter North". I'm not politically correct, but why does this remind me of The Twilight Zone's "To Serve Man" episode?
http://online.wsj.com/article/SB118951900888623799.html?mod=yahoo_hs&ru=yahoo
on September 11, 2007 7:57 AMLooks like it's not going to well so far. Dubai was only able to buy 0.1% at their offer price.
http://online.wsj.com/article/SB119184563724352112.html?mod=yahoo_hs&ru=yahoo
on October 9, 2007 10:35 AMPost a Comment
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