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Friday Night Rumor: MGM Selling Mirage to Penn Natl
After losing his shirt, bifocals, and the backup tire of his Jeep Cherokee by assuming that Ford and GM are actually competitive in the global car market, Kirk Kerkorian is allegedly selling one of his prize jewels on the LV strip: the MGM Mirage. While the sale seems a little odd at first, it makes sense when one considers the insatiable money pit that the CityCenter project has become for the nonogenarian. After scrapping wave after wave of amenity at CC (gold plates bidets are out, plywood outhouses are in) and still being over budget by billions of US pesos, the old man has drawn a line in the sand, first by selling Treasure Island and now apparently the Mirage itself. In July 2008 Penn National was left at the altar by Fortress and Centerbridge, but ended up in possesion of the $1.25Bn engagement ring (preferred stock by its cold-feeted PE suitors, which incidentally is now worth a lot more than FIG's market cap), and like any spurned lover vowed to take over the world, or in this case Las Vegas. As CEO Peter Carlino was quoted in a Bloomberg interview in November," We would like to come to Las Vegas, but only under the right circumstances. We do not want to build new here. This is not a place to go spending capital on new construction because it’s too unpredictable, too dangerous and way beyond our risk profile. Coming here will mean finding the right existing property under construction or existing." and "There’s lots of properties we’d love to own in Las Vegas." Like Spearmint Rhino (Ed.)
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It was my understanding that the Mirage & Bellagio are already pledged to to cover the City Center debt and both have had active private room players.
Their other properties like Circus Circus, Excalibur, etc on the other hand never fit the company profile, simply being left-overs from buying the Mandalay Bay and the land.