In April, MGM Mirage
Wednesday morning, MGM and Kerzner International announced a 50/50 joint venture to develop a multibillion site at the corner of Las Vegas Boulevard and Sahara Avenue. MGM will contribute the 40-acre site to the joint venture, while Kerzner will contribute cash equity to the joint venture, valuing the land at $20 million per acre, representing virtually instant value creation for MGM. The companies anticipate a one-year design phase and three years for construction.
Despite the news, MGM's stock is down 11% to under $77 per share in pre-market trading, as Kirk Kerkorian's Tracinda Corp. -- MGM's majority stockholder -- announced that it has decided to back off negotiations to acquire MGM's Bellagio and Project CityCenter. According to the Wall Street Journal, the land value implied by the MGM-Kerzner announcement reportedly factored into the decision.
The MGM-Kerzner project will be part of the ongoing widespread redevelopment of the north end of the Las Vegas Strip that will include Wynn Resorts'
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