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WASHINGTON : US casino titan MGM Mirage and Kerzner International announced plans Wednesday to jointly build a multibillion-dollar resort complex on Las Vegas's glittering Strip.
MGM Mirage, the world's second-biggest gaming operator, and Kerzner International, owner of the flagship Bahamas resort Atlantis, said they had agreed to create a 50-50 joint venture to build the property.
MGM Mirage will provide approximately 40 acres (16 hectares) of land, valued at 20 million dollars per acre, for the project, which Kerzner International Holdings Ltd. will develop and operate, the companies said in a joint statement.
Kerzner International and one of its financial partners will provide cash equity, they said, without revealing details on financing or the precise plans for the project, another addition to the famed US gambling mecca.
Meanwhile, billionaire Kirk Kerkorian, MGM Mirage's majority stakeholder, abandoned plans to buy two of its prize assets through his personal holding company.
Tracinda Corp., Kerkorian's holding firm, which owns 56.3 percent of MGM Mirage, said it had dropped its proposal to buy two of the company's most prized Vegas assets: the Bellagio Hotel and Casino, and CityCenter, a 7.4-billion-dollar mixed-use development being built next door.
A Tracinda statement said the joint venture with Kerzner "demonstrates that there is significant potential to unlock value for the company's shareholders through a variety of strategic transactions involving the company's assets."
MGM Mirage said it was informed of Tracinda's decision Tuesday and as a result had dismantled a special panel to consider its proposals.
Kerkorian's initial announcement was seen as a prelude to a possible restructuring of MGM Mirage.
His May 22 announcement, arguing the company was not delivering enough value to shareholders, drove MGM Mirage shares more than 20 percent higher that day.
Wednesday the shares tumbled 6.52 percent to 80.86 dollars in midday trading on the flurry of company statements.
"The announcement raises further uncertainty about the company's future amid continued consolidation and buyout interest in the industry," said Richard Jahnke of Briefing.com.
Sumit Desai, a gaming analyst at Morningstar, downplayed the idea of a move on MGM Mirage, despite recent takeovers by private equity firms. Kerzner International itself was bought by Colony Capital and Providence Equity for 3.6 billion dollars in March.
MGM Mirage management has made clear they want the company "to stay independent and to stay in its current form," Desai told AFP.
MGM Mirage and Kerzner International said they planned to finalize the joint venture in the July-September period this year.
MGM Mirage, the largest landholder on the Las Vegas Strip, signaled other such tie-ups could be in the pipeline in the rapidly consolidating US gaming industry.
"We see this type of relationship as a major part of our company's future," said Lanni.
"We believe this joint venture could well serve as a model for similar transactions which we think could further enhance shareholder value by accelerating growth and conserving our capital, allowing us to pursue other growth opportunities and/or return excess capital to our shareholders."
- AFP /ls
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