Report: MGM MIRAGE hires banker to shop assets

Apr 5, 2009 7:59 AM
Staff & Wire Reports |

Casino operator MGM MIRAGE, struggling under a heavy debt burden and waning consumer spending, has hired Morgan Stanley to help it shop assets, The Wall Street Journal reported Saturday.

According to the report, which cited unnamed people familiar with the matter, the Las Vegas-based company is considering selling the MGM Grand Detroit in Michigan and the Biloxi Beau Rivage in Mississippi, potentially fetching up to $2 billion.

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Separately, The Journal reported that billionaire James Packer, who owns casinos in his native Australia, is considering buying a stake in CityCenter, MGM's venture with Dubai World. Packer, who controls Crown Ltd., is in talks with Los Angeles-based investment firm Colony Capital LLC, the report said, citing unnamed sources.

MGM Mirage, which is majority owned by billionaire Kirk Kerkorian, has had trouble funding its $8.7 billion CityCenter project.

On Monday MGM decided to plow $200 million into the development, which covered a portion owned by partner Dubai World. However, the companies still need to pay about $800 million more in equity before they can access a $1.8 billion credit agreement that completes its funding.

Last month, Crown — which is publicly traded in Australia — scrapped a $1.8 billion cash deal to buy Cannery Casino Resorts of Las Vegas outright, though it retains an option to purchase Cannery within two years under the same terms.

Besides Australia, Crown owns and operates properties in Britain, Canada and Macau.