not considering stake in Las Vegas development,
by Ross Kelly -
6th April 2009
has denied media reports that it is considering
taking a stake in the troubled City Center development
in Las Vegas.
$US8.6 billion ($12.03 billion) development is
owned by MGM Mirage and Dubai World.
is not having any discussions with MGM or Dubai
World with respect to any such investment in City
Center," Crown said today in a statement.
Wall Street Journal quoted an unnamed source as
saying Crown was considering investing in the
project with US investment firm Colony Capital.
source said Crown and Colony “would step
in and take over the funding requirements. The
idea is to keep City Center going”.
Mirage (NYSE: MGM) is a Las Vegas, Nevada-based
business engaged in the development, ownership
and operation of hotels and casinos throughout
the world. The company began operations on May
31, 2000 after the completion of a merger of MGM
Grand Inc. and Mirage Resorts, Inc. It is currently
the second largest gaming company in the world.
Armenian Billionaire Kirk Kerkorian and his Tracinda
Corporation are currently the majority owners
of MGM Mirage. Kerkorian was also the former owner
of the Metro-Goldwyn-Mayer movie studio, from
which the predecessor corporation MGM Grand, Inc.
derived its name.
As of 2005, the company owns 831 acres (3.4 km²)
of property on the Las Vegas Strip. Its yearly
revenue is around $7.4 billion USD. The company
also owns the recently completed MGM Grand Detroit,
in downtown Detroit, Michigan and recently opened
MGM Grand Macau in December 2007, owned and operated
through a 50/50 partnership between MGM Mirage
and Pansy Ho Chiu-king.
company began operations on May 31, 2000 after
the completion of a US$6.4 billion merger, the
largest ever in the industry. At the time of the
merger, MGM Mirage was the largest gambling company
in the world (although it was subsequently succeeded
by Harrah's Entertainment). Before the merger,
MGM Grand had been in operation since the 1960s
and Mirage Resorts (formerly Golden Nugget Companies,
Inc.) had been in operation since the 1970s.
On January 26, 2004, MGM Mirage completed the
sale of its two Golden Nugget casinos -- the Golden
Nugget Las Vegas and the Golden Nugget Laughlin.
The former, in downtown Las Vegas, was the first
casino owned by Steve Wynn, and was the foundation
on which he built the MGM Mirage predecessor corporation
Mirage Resorts. The Golden Nugget properties were
purchased by the Las Vegas-based private investment
firm Poster Financial Group, Inc. for approximately
On June 4, 2004, MGM Mirage announced a bid to
acquire one of its major competitors, Mandalay
Resort Group, for $68 per share plus assumption
of debt. The ensuing negotiations between the
two companies included at one point an announcement
that the Mandalay board was rejecting the offer
because of antitrust concerns. On June 15, 2004,
however, both companies' boards approved a revised
offer of $71 per share. The agreement called for
MGM Mirage to pay $4.8 billion and to assume $2.5
billion in debt. The transaction was completed
on April 26, 2005 for $7.9 billion.
On June 23, 2004 MGM Mirage completed its $140
million sale of the MGM Grand Darwin to SKYCITY
Announced on November 10, 2004, Project CityCenter
on the Las Vegas Strip, is a 76 acre (600,000
m²), $7 billion, project on the site of the
Boardwalk Hotel and Casino and adjoining land
is planned as a multi use project. It will consist
of hotel, casino, condo, retail and other uses.
The first elements of this project are expected
to be available in 2009.
On May 31, 2005 MGM Mirage started construction
on the MGM Grand Macau.
On April 25, 2006, MGM Mirage announced with Foxwoods
Resort and Casino a joint partnership in developing
an expansion plan at Foxwoods that will include
a casino using the MGM Grand brand.
On October 16, 2006, MGM Mirage announced that
it planned to sell the Colorado Belle Hotel &
Casino and Edgewater Hotel and Casino to a partnership
of Anthony Marnell III and Sher Gaming. The sale
price was $200 million. The sale closed on June
On October 31, 2006, MGM Mirage announced plans
to sell Primm Valley Resorts to Herbst Gaming
for $400 million. The proposed sale would not
include the Primm Valley Golf Club. The sale closed
on April 10, 2007.
On April 19, 2007 the company announced that it
planned to purchase a 7.6-acre (31,000 m2) site
from Concord Wilshire Partners for $130 million
and a 25.8-acre (104,000 m2) site from Gordon
Gaming for $444 million. The two parcels give
the company complete control of the southwest
corner of the Sahara and Las Vegas Boulevard intersection.
When combined with underused parts of the Circus
Circus site, the company will have a 68-acre (280,000
m2) site for future development. The Concord site
had been the proposed location for the Maxim Casino.
On August 22, 2007, Dubai World said it will buy
a 9.5 percent stake in MGM for about $2.4 billion.
It will also invest about $2.7 billion to acquire
a 50 percent stake in MGM's CityCenter project,
a $7.4 billion, 76-acre (310,000 m2) Las Vegas
development of hotels, condos and retail outlets
due to open in 2009. Dubai World will pay MGM
Mirage an additional $100 million if the project
opens on time and on budget. The investment firm
will buy 14.2 million shares from MGM Mirage at
$84 each, a premium of about 13 percent over Tuesday's
closing price. The firm will also issue a public
tender for an additional 14.2 million shares at
the same price. The public tender is due to begin
during the week of Aug. 27.
On October 29, 2008, MGM Mirage halted a $5 billion
Atlantic City project, which would have risen
on land next to the Borgata. The announcement
came on the same day MGM Mirage reported a 67
percent plunge in third-quarter earnings, largely
because of sluggish revenue from its properties
on the Las Vegas strip.
"We continue to believe Atlantic City represents
an important market for further development,"
Terry Lanni, MGM's chairman and CEO, said in a
statement. "We intend to resume development
at such time as economic conditions and capital
markets are sufficiently improved to enable us
to go forward on a reasonable basis."
On December 16, 2008, MGM Mirage announced the
sale of its Las Vegas Treasure Island resort and
casino to billionaire Phil Ruffin. The sale was
completed on March 20, 2009, where Ruffin took
possession of the property and its operations.
$600 million in cash was wired to MGM Mirage with
a $175 million secured note bearing interest at
10% payable not later than 36 months after closing,
for a total sale price of $775 million.
On March 23, 2009 Dubai World the United Arab
Emirates domestic and international investment
arm of the Dubai emirate government announced
that it and a wholly-owned subsidiary Infinity
World have filed a lawsuit in the Delaware Chancery
Court claiming that MGM Mirage breached it's CityCenter
joint venture agreement after the company filed
it's 10-K report with the U.S. Securities and
Exchange Commission which states in part "There
is substantial doubt about our ability to continue
as a going concern." and "it cannot
provide assurance that its business would generate
sufficient cash flow from operation." Dubai
World through Infinity World owns 9.5% of MGM
Mirage's stock and has invested a significant
amount of funding into CityCenter giving it part
ownership of the project are asking the court
to relieve it of any obligations under the agreement.
2009 Possible Sale of MGM Grand Detroit and Beau
on April 6, 2009 news reports began to surface
that MGM Mirage hired investment firm Morgan Stanley
to assist the company in finding possible buyers
for the MGM Grand in Detroit, Michigan and the
Beau Rivage in Biloxi, Mississippi. The MGM Grand
Detroit and Beau Rivage are considered to be MGM
Mirage's top performing properties and if sold
could fetch a total of $1-$2 billion dollars which
then would be used to lower MGM Mirage's debt
Travel and Tourism
Man Australia does not represent MGM Mirage