NEW YORK (Reuters) – MGM Mirage and state-owned investment company Dubai World said on Wednesday that they will spend up to $800 million to jointly buy MGM shares in the latest move to increase Dubai’s stake in the casino company.

MGM and Dubai World plan to make a cash tender offer for 10 million shares at between $75 and $80 each, a premium of about 7.2 percent to 14.3 percent over Tuesday’s closing price. The casino company’s shares surged 4.4 percent on Wednesday.

“This morning’s tender offer by MGM and Dubai World supports our view that the support for the shares at the $80 level is real rather than perceived,” CIBC analyst David Katz said in a note.

Investor Kirk Kerkorian’s Tracinda Corp, owner of about 52.4 percent of MGM’s outstanding shares, does not plan to tender any of its shares in the world’s No. 2 casino operator, MGM said in a filing with the U.S. Securities and Exchange Commission.

Dubai World will purchase 50 percent of the shares tendered. If all 10 million shares are tendered, Dubai World’s stake would rise to about 8.4 percent from 6.6 percent.

Dubai World has been doggedly expanding its stake in MGM, which owns the 11 Las Vegas casinos including Bellagio, Luxor, and New York – New York.

The move follows the purchase of 5 million MGM shares from Kerkorian’s Lincy Foundation in late December. In that deal, Dubai World paid $424 million, or $84.80 a share.

Dubai World started building up its stake in MGM in August 2007 as part of a deal that included the purchase of 14.2 million shares from MGM and the acquisition of a 50 percent stake in MGM’s massive CityCenter project in Las Vegas.

Dubai had an earlier tender offer spurned by MGM shareholders. In that October offer, MGM shareholders tendered only 348,838 of the 14.2 million shares Dubai World sought after the stock surged ahead of the $84 offer price.

MGM shares rose $3.11 to $73.11 in morning trade on the New York Stock Exchange.