MGM MIRAGE and Kerzner International to Develop Multi-Billion Dollar Las Vegas Resort
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MGM MIRAGE and Kerzner International to Develop Multi-Billion Dollar Las Vegas Resort
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Category: North America & West Indies / Carribean islands -
This is a press release selected by our editorial committee and published online for free on 2007-06-21
MGM MIRAGE (NYSE: MGM) and Kerzner International Holdings Limited
("Kerzner" or "Kerzner International") announced today that the companies
have entered into a letter of intent to form a 50/50 joint venture to
develop a multi- billion dollar integrated resort property on the Las Vegas
Strip. The parties plan to enter into immediate negotiations with a view to
concluding a definitive agreement in the third quarter of 2007.
The new resort will be designed for approximately 40 of the 78 acres of
land owned by MGM MIRAGE, located on the corner of Las Vegas Boulevard and
Sahara Avenue. Kerzner will lead the planning and conceptualization of this
project. The joint venture is expected to draw upon MGM MIRAGE's
substantial presence and experience in Las Vegas and Kerzner's experience
in developing and operating some of the world's most recognized and
successful destination resorts.
"We see this type of relationship as a major part of our company's
future," said Terry Lanni, Chairman and CEO of MGM MIRAGE. "Our
considerable real estate holdings, combined with our experience and
efficiencies in developing major entertainment resort properties, are
unmatched. We believe this joint venture could well serve as a model for
similar transactions which we think could further enhance shareholder value
by accelerating growth and conserving our capital, allowing us to pursue
other growth opportunities and/or return excess capital to our
shareholders."
Sol Kerzner, Chairman and CEO of Kerzner International, observed: "We
have studied the Las Vegas market for some time and believe this is an
outstanding opportunity to create one of the most innovative and exciting
destination resorts in the world. We are delighted to join forces with MGM
MIRAGE."
Under the terms of the agreement, MGM MIRAGE will provide the land for
the resort and Kerzner International and one of its financial partners will
provide cash equity, such that each party owns 50 percent of the project.
The land being contributed by MGM MIRAGE is being valued at $20 million per
acre. The new integrated resort complex is anticipated to be a
multi-billion dollar project and will be financed through equity
contributions and third-party debt financing.
The broad conceptual design direction of the new resort has been agreed
by the parties and design and planning is expected to take approximately
one year to complete. Upon completion of the design phase, both parties
anticipate a three year construction period. The as-yet unnamed resort
project may utilize existing brands owned by either MGM MIRAGE or Kerzner
International, or a new brand will be introduced.
"This is an exciting opportunity for our company," said Jim Murren,
President, CFO and Treasurer of MGM MIRAGE. "This is a prime location in
the heart of a rapidly developing area of the Las Vegas Strip. Partnering
with a highly respected global resort operator on such a prime piece of Las
Vegas real estate will certainly result in a spectacular project. This
resort will further enhance the Las Vegas tourist experience and drive
incremental visitors to the Strip. This development will further elevate
the value of our surrounding land holdings and assets."
MGM MIRAGE (NYSE: MGM), one of the world's leading and most respected
hotel and gaming companies, owns and operates 17 properties located in
Nevada, Mississippi and Michigan, and has investments in three other
properties in Nevada, New Jersey and Illinois. In addition, the Company has
major new developments under construction in Nevada, Michigan and Macau
S.A.R. CityCenter is a multi-billion dollar mixed-use urban development in
the heart of the Las Vegas Strip; a new MGM Grand hotel and casino complex
is being built in downtown Detroit; and the Company has a 50% interest in
MGM Grand Macau, a hotel-casino resort currently under construction in
Macau S.A.R. MGM MIRAGE supports responsible gaming and has implemented the
American Gaming Association's Code of Conduct for Responsible Gaming at its
properties. MGM MIRAGE also has been the recipient of numerous awards and
recognitions for its industry-leading Diversity Initiative and its
community philanthropy programs. For more information about MGM MIRAGE,
please visit the company's website at http://www.mgmmirage.com.
KERZNER INTERNATIONAL HOLDINGS LIMITED, through its subsidiaries, is a
leading international developer and operator of destination resorts,
casinos and luxury hotels. Kerzner's flagship brand is Atlantis, which
includes Atlantis, Paradise Island, a 3,700-room ocean-themed destination
resort in The Bahamas. This unique destination features a variety of
accommodations, all built around a 100-acre waterscape with over 20 million
gallons of fresh and saltwater lagoons, pools and habitats, the world's
largest open-air marine habitat and some of the most beautiful beaches in
the world. Kerzner is extending its Atlantis brand globally with the
development of Atlantis, The Palm, Dubai, a 1,500-room, water-themed resort
expected to open in late 2008 on The Palm, Jumeirah. Kerzner has also
commenced construction of a 600 room, destination casino resort in Morocco
that will open in 2009, which will be operated by Kerzner under a new brand
that it will be introducing to the market. Kerzner also manages six luxury
resort hotels under the One&Only brand. The resorts, featuring some of the
top-rated properties in the world, are located in The Bahamas, Mexico,
Mauritius, the Maldives and Dubai. An additional One&Only property is
currently in the development stages in South Africa. For more information
concerning Kerzner and its operating subsidiaries, visit kerzner.com.
Statements in this release which are not historical facts are "forward
looking" statements and "safe harbor statements" Under the Private
Securities Litigation Reform Act of 1995 that involve risks and/or
uncertainties, including risks and/or uncertainties as described in the
company's public filings with the Securities and Exchange Commission.
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