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Dubai World Extends MGM Mirage Tender Offer

LAS VEGAS-News of the extension of the offer, and of a possible increase in the per-share-offer price, helps push shares of MGM Mirage to a new 52-week high.

By Brian K. Miller | Updated on September 25, 2007

LAS VEGAS-Dubai World on Tuesday extended its tender offer for up to 14.2 million shares of MGM Mirage at $84 per share to Oct. 5 from Sept. 24. To date, only about 730,000 shares have been tendered in response to the offering. The announcement, combined with an analyst’s suggestion that the offer price may increase in the coming weeks, pushed MGM’s share price to a new 52-week high.

Shares of MGM Mirage traded as high as $89 per share Tuesday on average volume before closing the day at around $86.72, up $1.36 on the day. The previous 52-week high was $88.69. Published reports are attributing a portion of the increase to a client note published by a J.P. Morgan Securities Inc. analyst Harry Curtis suggesting that Dubai World may raise its tender offer in order to accelerate its share accumulation.

Dubai World announced in mid-August that it would make the tender offer as part of a $5-billion investment agreement that also included Dubai World acquiring 14.2 million shares of newly issued stock and making a $2.7-billion investment in MGM’s CityCenter project on the Las Vegas Strip, making it a 50% partner in the $5.4-billion development. If it acquires all the shares it has agreed to attempt to acquire, Dubai World would have an approximate 9.5% share of MGM Mirage.

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