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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Kerkorian stock buy falls short

8 January 2007

LAS VEGAS, Nevada -- A move by billionaire investor Kirk Kerkorian to significantly increase his majority ownership in MGM Mirage fell short of its goal Friday.

Through Tracinda Corp., the 88-year-old Kerkorian's wholly owned investment vehicle, the Los Angeles-based investor said he had acquired just less than 445,000 shares of MGM Mirage stock for $55 per share. However, in November, Kerkorian announced he wanted to buy 15 million shares.

Kerkorian already owned 158.3 million shares of MGM Mirage, or 55.8 percent of the company. Friday's announcement took his stake in gaming operation to more than 158.8 million shares, or a 55.9 percent ownership.

Kerkorian had hoped to increase his investment to almost 62 percent.

Gaming analysts said MGM Mirage investors didn't want to sell their shares to Kerkorian because they believe the company's stock price will climb.

"We think the low turnout is a result of improved optimism for shares since the initial offer was made in late November," Bear Stearns gaming analyst Joe Greff said in a note to investors. "Shares have traded above the $55 per share offer for the majority of time since the November 22 offer. The low turnout shows investor confidence in the shares, and raises the possibility of a higher offer."

MGM Mirage shares fell 20 cents, or 0.35 percent, Friday to close at $56.90 on the New York Stock Exchange. On the day Kerkorian made the offer, a 12 percent premium above the company's previous day closing price, MGM Mirage shares jumped almost 11 percent, from $49 to $54.21.

MGM Mirage operates 10 Strip casinos and is building the $7 billion Project CityCenter, which includes on its 66-acre site a 4,000-room hotel-casino, high-rise residential, retail and entertainment amenities.

Kerkorian stock buy falls short is republished from Online.CasinoCity.com.