MGM MIRAGE and Dubai World to Form Long-Term Strategic Relationship
22 Agosto 2007 - 9:30AM
PR Newswire (US)
- Dubai World to invest $2.7 billion for a 50 percent interest in
CityCenter in Las Vegas and will make a significant equity
investment in MGM MIRAGE - LAS VEGAS, Aug. 22
/PRNewswire-FirstCall/ -- MGM MIRAGE (NYSE:MGM) and Dubai World
today announced that they have signed definitive agreements to form
a long-term strategic relationship whereby Dubai World will invest
approximately $5 billion in MGM MIRAGE consisting of a $2.7 billion
investment in CityCenter and up to $2.4 billion in purchases of MGM
MIRAGE common stock. The companies will enter into a 50/50 joint
venture in the landmark CityCenter development in Las Vegas and
Dubai World will acquire a significant minority equity position in
MGM MIRAGE. (Photo:
http://www.newscom.com/cgi-bin/prnh/20070822/LAW059 ) The joint
venture, CityCenter Holdings LLC, will be owned equally by MGM
MIRAGE and Infinity World Development Corp., a wholly-owned
subsidiary of Dubai World. Upon closing, CityCenter Holdings LLC
will own 100 percent of CityCenter, a mixed-use luxury residential,
resort and retail complex currently being developed by MGM MIRAGE
on the Las Vegas Strip. In addition to investing in the joint
venture, Dubai World through Infinity World Investments, will
purchase up to 28.4 million shares of MGM MIRAGE representing
approximately a 9.5 percent equity stake. Dubai World will seek to
accomplish this through a combination of a public tender offer for
14.2 million shares of the outstanding stock at a price of $84 per
share, which represents an approximate 13% premium over yesterday's
closing price, and an agreement to subsequently purchase an
additional 14.2 million shares directly from the Company at the
same price, for a combined investment of approximately $2.4
billion. The companies anticipate that the joint venture investment
will close by the end of the year, and that the tender offer will
commence during the week of August 27, 2007. The parties anticipate
that the purchase of shares from MGM MIRAGE will close concurrently
with or soon after the closing of the tender offer subject to
requisite approvals. In connection with the joint venture, Dubai
World will initially contribute approximately $2.7 billion for 50
percent of the equity in CityCenter. MGM MIRAGE will contribute the
CityCenter assets which the parties have mutually valued at $5.4
billion, and receive 50 percent of the equity in CityCenter.
Following the close of the joint venture transaction, MGM MIRAGE
will receive a cash distribution of $2.7 billion. By completing
CityCenter on budget and on schedule, MGM MIRAGE will receive
additional consideration of $100 million. The joint venture will
obtain project specific financing to fund remaining project costs.
MGM MIRAGE will continue to serve as developer of CityCenter and
upon completion, the joint venture will pay MGM MIRAGE a management
fee to operate CityCenter's resort casino as well as the
development's retail activities and the Vdara condo-hotel tower.
"This is a transforming event for MGM MIRAGE and Las Vegas," said
Terry Lanni, Chairman and CEO of MGM MIRAGE. "This partnership with
Dubai World brings us a relationship with an
internationally-respected developer of large- scale luxury
properties that attract an international clientele. Dubai World's
proficiency in real estate, combined with our company's operational
expertise, strong brands and world-renowned resorts, creates
competitive advantages that we believe will benefit all of our
stakeholders. We are extremely pleased to be working with Dubai
World. We have a tremendous amount of respect for Sultan Bin
Sulayem and all that his company has accomplished. "This
transaction is immediately accretive to long term earnings and will
have a profound impact on our balance sheet. Dubai World is making
a significant investment in our company that will greatly increase
our growth and earnings. We welcome Dubai World's long term
commitment to our company through the joint venture and these share
purchases," Mr. Lanni continued. Sultan Bin Sulayem, Chairman of
Dubai World said, "The announcement today brings together two
companies known for creating landmark developments that have the
ability to change the face of luxury living and destination
tourism. In seeking international expansion, we chose a partner who
would complement our strengths in large-scale development as well
as share our view of investing for the long-term. We were attracted
by MGM MIRAGE's superior assets, locations, and brands. Terry Lanni
and his management team have a proven ability to create
extraordinary customer experiences that generate demand and earn
customer loyalty. "Our vision is to create a global portfolio of
signature properties that will create value for generations to
come. The unprecedented CityCenter will redefine the luxury
lifestyle and incorporate world-class elements of fine art and
design, fulfilling our goal of creating landmark developments while
further expanding into the important U.S. real estate market. We
look forward to making this project an international success and
sharing in other opportunities for expansion with MGM MIRAGE,"
continued Sultan Bin Sulayem. Targeted for completion in late 2009,
CityCenter is a luxury urban metropolis defined by its dazzling
vertical architecture rising from the Las Vegas Strip. CityCenter's
design team includes many of the world's foremost architects such
as Daniel Liebeskind, Lord Norman Foster, and Rafael Vinoly. The
self-contained city-within-a-city will include: * A dramatic Cesar
Pelli-designed 4,000-room resort casino; * Approximately 470,000
square-feet of retail and entertainment space; * 2,650 luxury
condominiums and condo-hotel units in multiple towers; and * Two
400-room non-gaming boutique hotels, one of which will be managed
by luxury hotelier Mandarin Oriental. Credit Suisse Securities
acted as financial advisors to Dubai World. UBS Investment Bank
served as financial advisors to MGM MIRAGE. Paul, Hastings,
Janofsky & Walker LLP acted as legal counsel to Dubai World and
Christensen, Glaser, Fink, Jacobs, Weil & Shapiro, LLP acted as
legal counsel to MGM MIRAGE. About MGM MIRAGE MGM MIRAGE
(NYSE:MGM), one of the world's leading and most respected hotel and
gaming companies, owns and operates 17 properties located in
Nevada, Mississippi and Michigan, and has investments in three
other properties in Nevada, New Jersey and Illinois. In addition,
the Company has major new developments under construction in
Nevada, Michigan and Macau S.A.R. CityCenter is a multi-billion
dollar mixed-use urban development in the heart of the Las Vegas
Strip; a new MGM Grand hotel and casino complex is being built in
downtown Detroit; and the Company has a 50% interest in MGM Grand
Macau, a hotel-casino resort currently under construction in Macau
S.A.R. MGM MIRAGE supports responsible gaming and has implemented
the American Gaming Association's Code of Conduct for Responsible
Gaming at its properties. MGM MIRAGE also has been the recipient of
numerous awards and recognitions for its industry-leading Diversity
Initiative and its community philanthropy programs. For more
information about MGM MIRAGE, please visit the company's website at
http://www.mgmmirage.com/. About Dubai World Dubai World is a major
investment holding company with a portfolio of businesses that
includes DP World, Jafza, Nakheel, Dubai Drydocks, Maritime City,
Istithmar, Kerzner, One & Only, Atlantis, Barney's, Island
Global Yachting, Limitless, Inchcape Shipping Services, Tejari,
Technopark and Tamweel. The Dubai World Group has more than 50,000
employees in over 100 cities around the globe. Dubai World's iconic
real estate projects include the Nakheel's Palm developments and
The World. The group also has extensive real estate investments in
the US, the UK and South Africa, unique hospitality destinations in
every corner of the world, and is a leading global port operator.
In the last five years, Dubai World has developed 80,000 luxury
residential villas and apartments and approximately three million
square feet of retail space. Forward-Looking Statement Statements
in this release which are not historical facts are "forward
looking" statements and "safe harbor statements" under the Private
Securities Litigation Reform Act of 1995 that involve risks and/or
uncertainties, including risks and/or uncertainties as described in
the company's public filings with the Securities and Exchange
Commission. http://www.newscom.com/cgi-bin/prnh/20070822/LAW059
http://photoarchive.ap.org/ DATASOURCE: MGM MIRAGE CONTACT:
Investment Community - Dan D'Arrigo, Executive Vice President and
CFO, +1-702-632-9888, Dan_D', or Media - Alan Feldman, Senior Vice
President, +1-702-891-4147, , both of MGM MIRAGE; or Christopher
Mittendorf, +1-212-704-8134, , or Somna Maraj, +1-212-704-8175, ,
both of Edelman, for Dubai World Web site:
http://www.mgmmirage.com/
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