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Dubai World Boosts Its Stake in MGM Mirage to 6.5%

Dubai World, the government-owned investment group, bought 5 million shares of MGM Mirage, boosting its stake in the world’s second-largest casino company to 6.5 percent.The holding company now holds 19.5 million shares of Las Vegas-based MGM, Dubai World said today in a U.S. Securities and Exchange Commission filing. Dubai bought the shares Dec. 26 for $424 million, or $84.80 a share, from the Lincy Foundation, a non-profit controlled by MGM majority shareholder Kirk Kerkorian.

The purchase brings Dubai World closer to its goal of buying as much as 28.4 million shares. In August, Dubai World Chairman Sultan Ahmed Bin Sulayem announced it would invest as much as $5.1 billion in the company and a 50 percent interest in MGM’s Las Vegas CityCenter development as the Persian Gulf nation diversifies its economy away from oil.

“They want to buy another 13, 14 percent of the company so there’s a lot of positive pressure on the stock,” Larry Klatzkin, an analyst with Jefferies & Co. in New York, said in an interview on Bloomberg Radio.

Dubai World has now invested $4.5 billion in MGM, Klatzkin said. Bin Sulayem said in an August interview that Dubai has an option to increase its stake to as much as 20 percent of MGM.

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