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July 4 - Last month American billionaire and CEO/president of private
investment firm Tracinda Corporation, Kirk Kerkorian, bowed out of talks with
MGM to buy two of its Las Vegas properties because of Sol Kerzner's
involvement with MGM.
Tracinda, which owns 56 percent of MGM, announced plans in May this year to
acquire two of MGM's most prizes Las Vegas properties, the well-known Bellagio
Hotel and Casino and the City Center project, which resulted in a 27 per cent hike in
the MGM share price.
However, last month Tracinda said that MGM's plan to team up with mega-resort
developer Sol Kerzner on a new multibillion-dollar Las Vegas resort on
the famous Las Vegas strip 'showed that the company was moving to unlock value
for shareholders'.
As a result, Kerkorian announced that Tracinda would no longer be pursuing
negotiations with MGM, causing MGM's stock to plummet by around 10 percent. The
company, however, said that it would continue to monitor its investment and
review future shareholder opportunities.
Kerzner International will provide financing and lead planning and design for
the fifty fifty joint venture with MGM, that is expected to cover around 40 acres of
the property currently owned by MGM on the corner of Las Vegas Boulevard and
Sahara Avenue.
MGM's land is valued at around $20 million an acre, putting MGM's contribution
at a staggering $800 million with the venture's overall value estimated to be
over $1.6 billion.
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