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Kerkorian Looks to Up Stake in MGM Mirage

LAS VEGAS-Already the majority owner of the locally headquartered casino operator, Tracinda Corp. plans to make a tender offer for another 15 million shares at $55 apiece.

By Brian K. Miller | Updated on November 22, 2006

LAS VEGAS-Kirk Kerkorian’s Tracinda Corp. announced this morning its intention to make a tender offer for up to 15 million shares of MGM Mirage at $55 per share. Tracinda, which is solely owned by the billionaire, already owns 158.4 million shares, or 56.3% of MGM’s outstanding stock. If successful, the tender offer would raise Tracinda’s ownership stake to 61.7%.

The offer is a 12% premium to MGM’s $49 closing share price on Tuesday. In noontime trading today (Wednesday, Nov. 22) the company’s share price stood at a 52-week high of $54.06, up more than 10% on the day.

JP Morgan Securities gaming analyst Harry Curtis told clients this morning in an email that the offer “shows that Kerkorian sees significant value in the shares, which we believe is largely related to future development in Macau and Las Vegas. In the near term, it could also suggest that trends in Las Vegas are very strong.”

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