The value of shares in MGM MIRAGE Inc. (MGM) fell to a level that will have it challenging its 52-week low on Friday following the announcement that 75% of the company’s outstanding shares were tendered in response to a special $80 offer.
Problem right now is the joint offer by MGM MIRAGE and its Dubai World partner, Infinity World (Cayman) L.P. is for 15 million shares while $109.3 million shares have been tendered.
There are 299.4 million shares of MGM outstanding but billionaire Kirk Kerkorian’s Tracinda Corp. owns 153.8 million shares. Kerkorian announced that he would not participate in the tender offer.
By the close of trading on Friday, in advance of the President’s Day federal holiday which closed Wall Street on Monday, the share price had dropped to $66.14, not far from the company’s 52-week low point of $61.17 per share.
Initially, the company reported through Mellon Investor Services LLC, the depositary for the joint tender offer, that 101.9 million shares had been tendered. But as a follow up, Mellon said they had failed to include nearly 7.5 million shares, thus raising the total to 109.3 million.
Mellon added that as soon as the total number of tendered shares is validated it will apply the proration factor and immediately issue payment for the shares accepted.
With most gaming analysts debating whether the country is in or entering a recession and just what impact that would have on major casino companies, the shares of the major companies have fallen accordingly in recent weeks.
Things haven’t gone well for Youbet.com Inc. (UBET) since it acquired an off-shore rebate shop in June of 2005. In fact, things got downright sticky when the U.S. Attorney’s Office in Las Vegas began an investigation of the Curacao rebate shop.
Oregon officials followed that up with a notice to Youbet that it was going to suspend the hub betting license of International Racing Group. And the Las Vegas feds raided some local horse betting parlors and confiscated a reported $1.5 million in IRG bettors’ funds. Youbet officials said they believed it was unlikely those funds would be recovered.
"In light of the future outlook for the IRG Business under the continuing investigation," Youbet said in a statement that it was discontinuing the operations and would take a fourth quarter impairment charge of $9.9 million.
Harrah’s Entertainment Inc. has chosen International Game Technology (IGT) to provide the company’s 60,000 slot machines with its new server-based technology.
IGT’s NextGen display is patented interactive touch screen LCD communications device that will be used for a wide range of player communications, promotions, interactions and rewards tied to the Harrah’s Total Rewards program.
Industry analysts expect server-based slot machines, currently being tested at select locations, to be the future of slot machines usage in casinos.
Four more gaming companies have announced the times and dates for the release of their quarterly fiscal reports. They are:
Melco PBL Entertainment Ltd. (MPEL) on Tuesday, Feb. 19, at 5:30 a.m. PST.
Ameristar Casinos Inc. (ASCA) on Wednesday, Feb. 20, at l:00 p.m. PST.
Pinnacle Entertainment Inc. (PNK) on Tuesday, Feb. 26, at 8 a.m. PST.
Scientific Games Corp. (SGMS) on Friday, Feb. 29, at 5:30 a.m. PST.
THE INSIDER: The New York Racing Association (NYRA) has been granted a 25-year extension to the racing franchise that permits it to operate Saratoga, Belmont and Aqueduct racetracks.
Despite a snowstorm, Penn National Gaming Inc. (PENN) successfully opened Pennsylvania’s newest racino, the Hollywood Casino at Penn National horse track in Grantsville.
Citing a disappointing first quarter and a massive $925 million expansion project, Moody’s Investors Service has placed the debt of Mohegan tribal Gaming Authority under review.
Ameristar Casinos Inc. (ASCA) has appointed Reginald Fullwood, Jr., as senior vice president and general manager of Ameristar Black Hawk in Colorado. Also, the company announced that it has increased its quarterly cash dividend by 2.4%. The company will pay a quarterly dividend of $0.105 per share on March 14 to shareholders of record on Feb. 29.
Lakes Entertainment Inc. (LACO) has hired ICR to conduct its investor relations. ICR currently represents more than 225 companies in a variety of industries.