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#2
05-22-2007, 09:43 AM
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Re: Bellagio news
Tracinda already owns 56% of MGM-Mirage and they earlier tried to increase their stake.
Forbes article Add: MGM up $16.75 or 26.6%. Nice. 
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#3
05-22-2007, 11:12 AM
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Re: Bellagio news
This is actually a corporate restructuring of monies. Kerkorian is the "owner" of MGM Mirage, but for legal reasons he is not referred to as the owner since he made the company public to get additional development capital - but he is still the greatest shareholder with 55% of the issued stock. Either Kerkorian wants to keep Bellagio and City Center private out of the MGM public corporation's control, or this is a posturing move to have the value of the land (and therefore his investment) increased. If the value of the land increases MGM may have additional leverage with the bankers who have helped finance City Center (a shady move, but a realistic possibility for Kerkorian). Another possibility could be that this is Kerkorian "priming" the value of the stock because he feels its undervalued.
"'He's obviously seeking to monetize his investment in this company,' said Susquehanna Financial Group analyst Robert LaFleur. 'It's a public declaration by Tracinda that they think the stock's undervalued.'" The last possibility could be restructuring the company like Starwood recently did by selling off the majority of their W Hotel properties realestate, leaving themselves with management and branding contracts. "Deutsche Bank (nyse: DB - news - people ) analyst Bill Lerner said the offer could make MGM Mirage a stronger company by taking key real estate off its books and allowing it to operate as a management company." "The move is Tracinda's second toward MGM Mirage in seven months. In November, Tracinda offered to buy 15 mln shares at 55 usd each, offering a 12 pct premium to the previous day's closing price, but shares promptly shot above the mark and traded consistently higher, so the effort fizzled." Interesting move by Kerkorian.
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