Kirk “Rifle Right” Kerkorian, CEO of Tracinda Corp, wants to throw one more jab at Steve Wynn and the Las Vegas luxury market before becoming a nonagenarian. Tracinda released a statement yesterday that says the company intends to make a bid for MGM’s Bellagio and CityCenter properties.
Kerkorian is going to turn ninety on June 6. He was born the day after “Army registration day,” or the day conscription for World War I began in the US. After failing to meet Army registration requirements in the maternity ward as a one-day old, Kerkorian went on to drop out of school in the 8th grade, become an amateur boxer, then a fighter pilot, then (just like that) the father of the megaresort with a net worth of $15bn.
Kerkorian has been vying with Steve Wynn for dominance of the Las Vegas luxury market for decades, in a battle that previously culminated in MGM’s purchase of Wynn’s Mirage property. Oh, that’s right, Kerkorian owns 56% of MGM, and virtually controls the company through his majority stake. Essentially he’s making a bid for his own assets, and causing the stock of the public company to skyrocket in price. The Tracinda filing sent MGM shares (NYSE: MGM) from almost $63 to almost $80 this morning. This means that in the last 12 hours, Kerkorian’s personal MGM stock has increased over $2.5bn in value. Kerkorian gets to, in one analyst’s words, “cherry-pick the best assets and growth from the public company” and reshuffle an asset pool, concentrating luxury properties in the private company. Some view this as problematic, from the Wall Street Journal:
Mr. Kerkorian controls the company through his majority stake. He is close to both the company’s board and its management. Those relationships could raise questions about how minority shareholders might fare in any deal that rejiggers the company’s assets. Analysts speculated that Mr. Kerkorian might want to pay cash or swap his MGM Mirage stock for the Bellagio and CityCenter.
Kerkorian Pushes MGM Shake-Up With Offer for Two Prized Assets [Wall Street Journal]