Dubai World has filed an application to the US’ Michigan Gaming Control Board to increase its stake in MGM Mirage (MGM) to 14.75 per cent from 9.4 per cent, a board official said yesterday.
“The board will consider the application at a hearing at 1000 Eastern Standard Time Tuesday [yesterday] and is likely to approve it,” Eric T Bush, administrative manager for the Michigan Gaming Control Board, told Zawya Dow Jones.
“Our intention is to increase our stake in MGM to 20 per cent eventually. Now it can take one, two or even 20 years but there is a strategy we are following to reach that mark,” Dubai World Chairman, Sultan Ahmed Bin Sulayem had told Emirates Business in a telephone interview.
Not divulging the strategy, Bin Sulayem said: “We will keep buying a stake in MGM whenever we feel like it, and as and when there is an opportunity to do so.”
In December 2007, Dubai World had purchased an additional five million shares of MGM Mirage for $242 million (or $84.80 per share), from Kirk Kerkorian’s Lincy Foundation.
In August 2007, Dubai World and MGM Mirage entered an agreement to jointly develop its $2.7bn CityCenter mega resort development on Las Vegas Strip, scheduled to open by 2009. As part of that deal, Dubai World purchased 14.2m shares from the MGM, which included a 50 per cent stake in the project.
The purchases would have given Dubai World a 9.5 per cent stake in MGM but investors had turned down Dubai World’s offer at that time, as the offer price was below the market price.
The recent purchase, however, brings Dubai World closer to its goal of 28.4 million shares.
Dubai World ups MGM stake