MGM - MGM MIRAGE

In 2000, when two of the largest brands in the U.S., MGM Grand Inc. and Mirage Resorts decided on a 6.4 billion dollar merger the second largest gaming company was born and named as the MGM Mirage. The company is based out of Las Vegas, Nevada. Among the shareholders Kirk Kerkorian, the former owner of MGM studios, was the largest shareholder at 58%, but after the company offered $1billion public stocks the effective share of Kerkorian was reduced to 39%, which was still not covered by the purchase of another 10% of the new shares on offer.

MGM Mirage has a property totaling 831 acres on the Vegas strip generating around $7.4 billion USD. They own and run a total of 12 casino hotels in Las Vegas alone including the most famous ones The MGM Grand and Mandalay bay.

In 2007, several promises were made by a foreign investment company called the Dubai World. They offered to buy an approximate 10% share of the company at around $2.4 billion and they also promised to extend a 50-50 investment share on the new 76 acre, $7.4 billion, CityCenter project, due to be complete in 2009. They have also promised a bonus of $100 million if the project opens on time and stays within budget. Following this they have also promised to buy 14.2 million share of the company at face value of $84 and at a premium of 13%.

In 2009, MGM sold The Las Vegas Treasure Island Resort and Casino to Phil Ruffin for a sale price of $775 million. the company came under quite a threat from its business partner on the CityCenter project, Dubai World, when a lawsuit claiming 'Breach of Contract' was filed in Delaware after the 10-K report was filed at the U.S. Securities and Exchange Commission which states that, "There is substantial doubt about our ability to continue as a going concern." and "it cannot provide sufficient assurance that it's business would produce sufficient cash flow from operation."

News reports of MGM hiring investment firms like Morgan Stanley started to surface in the mid 2009. This is said to be assisting the company to find potential buyers for Beau Rivage in Mississippi and MGM Grand, Detroit, Michigan. The company has till date denied the rumors that it is selling more of its properties and is saying that it does not need to file chapter 11.

www.gamblinginfo.com
03/08/2009
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