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Dubai World Ups Stake in MGM Mirage

LAS VEGAS-Controlling investor Kirk Kerkorian sells the investment arm of the Dubai government five million shares, raising its stake in the company to 6.5%.

By Brian K. Miller | Updated on December 28, 2007

LAS VEGAS-Casino-resort operator MGM Mirage said Friday morning that its controlling investor, Kirk Kerkorian, sold 5 million common shares of the company to Dubai World on Christmas Eve at $84.80 per share or $424 million. Dubai World acquired the shares from Kerkorian’s charity, the Lincy Foundation.

Including the 14.2 million shares it acquired directly from MGM Mirage in October and the 350,000 it took in from its tender offer one month earlier, the investment arm of the Dubai government now owns a 6.5% stake in the company. Kerkorian, for his part, continues to control more than 50% of MGM Mirage’s 299.4 million outstanding common shares through his Tracinda Corp.

Under its original agreement with MGM Mirage, Dubai World was to acquire a 50% stake in MGM Mirage’s multi-billion dollar CityCenter development on the Las Vegas Strip and at least 28.4 million common shares (9.5%) of the company, half directly from MGM Mirage and half from shareholders via a tender offer. While its investment in CityCenter and its direct share purchase went off without a hitch the tender offer failed, attracting only the aforementioned 350,000 shares because MGM’s share price jumped several dollars above the $84 per-share tender offer, leaving Dubai World well short of its minimum goal and out of sight of its maximum goal of a 20% stake.

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