Dubai’s tender for MGM shares fizzles
Dubai World’s offer to buy 14.2 million shares of MGM Mirage, the world’s second-largest casino company, expired with investors selling less than 3% of the stock the firm was seeking.
The investment company, run by Dubai’s government, said Monday that it would still buy 14.2 million MGM shares directly from the Las Vegas-based company at $84 each. The firm said last week that it might purchase more stock on the open market.
Shares of MGM Mirage, which is majority owned by billionaire Kirk Kerkorian, on Monday had their biggest jump since Aug. 22. Dubai World agreed that day to spend $5.1 billion to buy as many as 28.4 million shares, half from a public tender offer, and 50% of MGM’s CityCenter hotel-and-casino project. The Persian Gulf state is using cash from an economic boom fueled by real estate and oil.
In late September, Dubai World extended its offer to Oct. 5 after 5% of the shares had been tendered, prompting analysts including J.P. Morgan Securities Inc.'s Harry Curtis to say the firm may raise its bid.
MGM shares rose $5.31 to $98.29 on Monday. The stock has risen 32% since Aug. 21.
Dubai World said Monday that it owned 14.5 million MGM shares, or about 4.9% of the company, after purchasing 348,903 in the tender offer.