‘Captain’ Kirk pulls out another rabbit

May 29, 2007 5:56 AM

There are two principal schools of thought concerning Kirk Kerkorian’s announcement that he wants to buy the Bellagio and CityCenter from MGM Mirage Resorts.

First, at the age of nearly 90, the 56 percent owner of MGM stock has lost his appetite for going global and owning most of a company with assets in cities to which he has little interest in traveling. He prefers something close to home.

Secondly, he wants to effectively grab the attention of the universe of private equity companies that have shown a startling willingness to lavish huge sums on real estate and resorts related to the gaming business generally, and Las Vegas specifically.

I’d like MGM Mirage to get some of that attention, he may have been thinking, perhaps telling himself he’d like to see what the company’s hotels, casinos and hundreds of acres of Strip corridor real estate is all worth in a market unlike anything Las Vegas has ever seen before.

We may not have to wait long for what some watchers see as a "sophisticated marketing ploy" to generate results.

An insider in Sheldon Adelson’s Venetian organization was reportedly telling an acquaintance last week that if MGM is really serious about marketing some of its assets, then Adelson would like very much to buy The Mirage and Treasure Island, which just happen to be on the other side of the Strip from the Venetian and the under-construction Palazzo.

Meanwhile, back at the ranch, so to speak, executives within the MGM Mirage organization are closely examining versions of just one question: What might all of this mean to them?

Which brings them to all the subsidiary questions, such as what does it take to trigger change of control or property sale provisions in employment contracts — the kind of thing that has a lot to do with taking advantage of stock options, bonuses and the like.

"Big things are going to happen ”¦ that’s unless Kirk is doing his own version of stirring the pot to see what kind of attention he can attract," says one insider, a senior executive with another company who appeared to consider the possibilities for a moment before adding, "There’s a lot of money coming to Las Vegas."

In the meantime, the big thinkers in charge of getting the daily work done at MGM Mirage are keeping their focus on a future that will include new projects from Las Vegas to China.

 

 

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In the meantime, the big thinkers in charge of getting the daily work done at MGM Mirage are keeping their focus on a future that will include new projects from Las Vegas to China.

Dueling Fertittas?

The serious interest that Landry’s Restaurants and its chairman Tilman Fertitta have in the Binion’s Gambling Hall appeared to be very much alive several days ago.

Landry’s owns the Golden Nugget and the surge of activity by Nugget executives at the Horseshoe over the last week or so has made it clear a sale may be imminent.

But these things have been known to take sudden, unexpected turns. Two or three years back, Fertitta was close to buying the Riviera, when a well-connected local deal-maker tapped him on the shoulder and said, maybe you should take a close look at the Golden Nugget.

Fertitta decided he liked the Nugget. As he would tell me later, "The only people who think Strip property is worth $10-$15 million an acre are those with something to sell."

That thinking, as we now know, would quickly change. Anyone who can get Strip frontage for only $10-$15 million an acre in today’s market had better jump on it.

But I wonder if Tilman and Landry’s might have some sudden unexpected competition for Binion’s. Cousin Frank Fertitta III’s Station Casinos reportedly checked out the Binion’s facility recently.

Union dirty tricks?

Owners of the Atlantic City Hilton had to overcome some dirty tricks in beating back a challenge from the United Auto Workers Union which had come to win the right to bargain for Hilton employees.

Resorts International COO Roger Wagner says a phony letter was drafted under a Resorts letterhead urging Hilton supervisors to do whatever was necessary to win the election. The bogus letter promised supervisors would be rewarded. The Hilton won the election by about 50 votes.

Two days before the election Wagner said, "We feel we have a really good chance to win this."

Wilmott eyes Penn job

Former Harrah’s Entertainment COO Tim Wilmott is headed to Penn National where he appears destined to become the company’s new president.

This is one of those on-again, off-again situations that appears to be on again.

Wilmott and Penn Chairman Peter Carlino reportedly "failed to connect on a personal level" during the time when Penn and Carlino were taking a run at Harrah’s.