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Dubai World Begins MGM Mirage Tender Offer

LAS VEGAS-The $84-per-share offer for as many as 14.2 million shares of outstanding common stock is part of a $5-billion agreement announced last week.

By Brian K. Miller | Updated on August 27, 2007

LAS VEGAS-A subsidiary of Dubai World is commencing its cash tender offer for up to 14.2 million shares of the common stock of MGM Mirage as part of a $5-billion investment agreement the two companies announced last week. Upon the closing of the tender offer on Sept. 24, participating MGM Mirage stockholders will receive $84 in cash for each share tendered. If all 14.2 million shares are tendered, the payout would be $2.4 billion and Dubai World would control a 9.5% stake in the company.

The rest of the $5 billion is coming in the form of a direct investment in CityCenter, MGM Mirage’s massive mixed-use development under construction on the Las Vegas Strip. The investment will make MGM Mirage and DubaiWorld 50-50 partners in the $5.4-billion project. Targeted for completion in late 2009, CityCenter includes a 4,000-room resort casino, 2,650 condominiums in multiple towers, two 400-room non-gaming hotels and 470,000 sf of retail and entertainment space.

As part of the JV deal, MGM Mirage will continue to serve as developer of CityCenter and upon completion, will receive an ongoing management fee from the joint venture to operate the resort casino as well as the development’s retail activities and the Vdara condo-hotel tower.

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