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MGM Mirage OKs $5 Billion Deal with Dubai World: Report - ASHARQ AL-AWSAT English Archive
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NEW YORK (Reuters) – Dubai World, the investment holding firm of the Dubai government, will acquire a 9.5 percent stake in MGM Mirage and 50 percent of the casino operator’s CityCenter development project for $5 billion under a deal reported in The Wall Street Journal.

Under the deal, which MGM agreed to on Tuesday, Dubai World will pay $2.7 billion to acquire its stake in CityCenter, a high-end 76-acre development of hotels, condos and retail set for a 2009 opening, the Journal said.

The investment firm is also to buy 14 million shares from MGM Mirage at $84 each, or about $1.2 billion, a premium of about 13 percent over Tuesday’s closing price of $74.32 on the New York Stock Exchange.

Dubai World also intends to buy an additional 14 million shares from public shareholders at about the same price, according to the newspaper.

The Journal said the deal capped a run of profitable moves by Kirk Kerkorian, the 90-year-old billionaire who three months ago appeared to signal that MGM Mirage might be for sale. Instead, he lured a wealthy investor willing to pay a premium price for a big stake in the company and invest in its biggest project, the newspaper said.

Dubai World will pay an additional $100 million if CityCenter opens on budget and by the end of 2009, according to the report.

Dubai World’s investment gives MGM Mirage a $3.9 billion cash infusion, the newspaper said. And Kerkorian’s stake in MGM Mirage will shrink slightly to 51.65 percent from 54.15 percent, the Journal said, but he will remain the majority shareholder through his investment firm, Tracinda Corp.

Dubai World holds a multibillion-dollar portfolio that includes British ports operator P&O. Its private equity arm, Istithmar, last year bought a majority stake in the Mandarin Oriental New York, acquired retailer Loehmann’s, the Knickerbocker Hotel in New York and office block 280 Park Avenue in April.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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