MGM Mirage, Dubai to raise tender offer

Casino operator MGM Mirage Inc. will announce today that it is increasing its joint tender offer with Dubai World for MGM Mirage shares by 50% to 15 million, and it is setting the price at $80 a share, an executive said.

The revised tender offer, at a 20% premium over the stock’s most recent closing price, came after an MGM Mirage board meeting Tuesday in which directors discussed surging revenue resulting from the weak U.S. dollar, President Jim Murren said.

“We’re a beneficiary to the degree that America’s on sale,” Murren said. “There is a significant, very material influx of visitors coming to the United States, either from Canada, where the dollar’s at parity, or from Asia or from Europe, and they’re finding great value here in America and certainly in Las Vegas.

“We clearly think [the company] is undervalued, as does Dubai,” Murren said.

MGM Mirage and Dubai World announced an offer last week to buy 10 million MGM Mirage common shares for $75 to $80 each.

The shares fell $3.17, or 4.6%, to close at $66.47 on Tuesday.

Under the revised offer, Dubai World would buy 6.5 million of the shares offered, increasing its stake in the company to 9.4%, while MGM Mirage would buy 8.5 million. The company planned to file the tender offer Thursday, probably opening the window for sellers for 20 business days, Murren said.

Tracinda Corp., the investment arm of billionaire Kirk Kerkorian, will not sell shares of MGM Mirage. Because of the company share buyback, Tracinda’s stake would increase 1.5 percentage points to 53.9%.

MGM Mirage has about 293.8 million shares outstanding.