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Tracinda Corp. Eyes Bellagio, CityCenter

LAS VEGAS-Kirk Kerkorian's investment arm will attempt to acquire the properties from MGM Mirage Inc. and also will pursue strategic alternatives related to its 56% stake in the company.

By Brian K. Miller | Updated on May 21, 2007

LAS VEGAS-The investment arm of billionaire investor Kirk Kerkorian told the SEC late Monday that it will enter into negotiations with MGM Mirage to acquire its current and future flagship properties, the Bellagio and Project CityCenter. Tracinda Corp. also said in the filing that it will pursue “strategic alternatives” for its 56% stake in MGM Mirage that may include a financial restructuring of the rest of the company, which Kerkorian founded in 1997 as MGM Grand.

The news pushed shares of MGM Mirage up as much as 17% in aftermarket trading. MGM responded to the filing by saying that its board would begin considering the proposal at a meeting following Tuesday’s shareholder meeting “and will respond in due course.”

MGM is the world’s second-largest casino company, thanks to its acquisition of Mandalay Bay Resort Group in 2005. All told, MGM now controls 865 acres and 10 casinos along Las Vegas Boulevard with three miles of Strip frontage. Its jewel is the Bellagio, but not for long. Next door, it is developing the $7.4-billion CityCenter project, which got under way this time last year. The first phase of the integrated resort development will include a 4,000-room luxury hotel and casino, two 400-room non-gaming hotels, 2,900 condominium units and 500,000 sf of commercial space.

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