Dubai World gains less than expected MGM stake

A Dubai government investment fund said Monday it had gained a lower than hoped for stake in US casino and entertainment giant MGM Mirage.
Inifinity World Investments, a subsidiary of state-controlled Dubai World, said it would own 14.5 million shares, or 4.9 percent, of MGM following a deadline that expired Friday.
Under an agreement unveiled in August, MGM which owns multiple casinos along the famed Las Vegas Strip in Nevada agreed to sell 14.2 million shares to Dubai World at 84 dollars per share in a deal valued at 1.2 billion dollars.
Dubai World, however, had also sought to purchase an additional 14.2 million shares from MGM shareholders at the same price.
The deep-pocketed investment fund hoped the share transactions would enable it to snare a 9.5 percent stake in MGM, but private shareholders holding MGM stock appear to have balked at selling their shares to Dubai World for 84 dollars.
Only 348,903 shares were offered for sale to Dubai World by MGM shareholders despite the fund’s hopes of purchasing a much larger tranche of 14.2 million shares.
For now, Dubai World only appears to have won a 4.9 percent stake from share dealing.
MGM shareholders may hope to get a better future price from their stock rather than selling to Dubai World at 84 dollars a share.
The casino behemoth’s shares were trading up 0.4 percent at 93.37 dollars in morning trading.
Dubai World and MGM agreed to form a 50-50 joint venture, as part of the August announcement, to develop the CityCenter, a vast complex housing a casino, hundreds of luxury apartments, retail outlets, spas, meeting rooms and entertainment venues.
The CityCenter is being built on the Las Vegas Strip and neighbors other large casinos already owned by MGM including the Bellagio, Excalibur, the Luxor and the MGM Grand among others.
Dubai World is aggressively expanding its global holdings, many of which are focused on real estate, including a one billion dollar investment to build new facilities in Cape Town, South Africa, for the 2010 football World Cup.

Copyright AFP (Agence France-Presse), 2007