COMPANY OVERVIEW MGM Resorts International is a Paradise, Nevada based corporation that brands itself as a global hospitality company. It is the second largest gaming company in the world by revenue - about US$6 billion in 2009. It owns and operates 15 properties in Nevada, Mississippi and Michigan, and has 50% investments in four other properties in Nevada, Illinois and Macau, China.
The company began as MGM Mirage on May 31, 2000, with the merger of MGM Grand Inc. and Mirage Resorts Inc.In the mid-2000s, growth of its non-gaming (lodging, food, retail) revenue began to outpace gaming receipts and demand for high-rise condominiums was surging, with median property prices in Las Vegas twice the national average. The company shifted its business model from fully owning and operating resorts and casinos, to being more real estate focused - launching the massive Citycenter mixed-use project.
Unfortunately, the latter's development coincided with vast overbuilding on the Strip and a global financial crisis, causing large losses and writedowns in valuation.In June 2010, the company changed to its present name, to reflect its latest strategy of expanding worldwide, including licensing its brand and expertise to develop non-gaming hotels and residences. Through 6 global offices of its subsidiary, MGM Resorts Hospitality, it has agreements to develop and manage nongaming Bellagio, MGM Grand and Skylofts hotels in countries such as Dubai, Abu Dhabi, India, Vietnam, Egypt and China by 2013.Billionaire investor Kirk Kerkorian and his Tracinda Corporation were, until May 2009, the majority shareholders of MGM Mirage; Kerkorian was the former owner of the Metro-Goldwyn-Mayer movie studio, from which the predecessor corporation, MGM Grand Inc. derived its name.
Following a one-billion-dollar stock offering by MGM Mirage amidst the global credit crutch, Tracinda's shares were diluted from 53. 8 percent to 39 percent. In May 2010, hedge fund Paulson & Co acquired 40 million shares (about 9%) to become MGM Resorts’s second-largest shareholder.HISTORY MGM Mirage (now known as MGM Resorts International) was formed as a result of the merger between MGM Grand and Mirage Resorts. Mirage Resorts was first licensed by the Nevada Gaming Commission in 1946 under the name, Golden Nugget, and later adopted its present name in 1991.
At the time of the merger, it was the oldest established gaming company in the state. Mirage Resorts' holdings included: Bellagio, the Mirage, Treasure Island and the Golden Nugget in Las Vegas; the Golden Nugget in Laughlin, Nevada; and Beau Rivage in Biloxi, Mississippi.MGM Grand owned and operated the MGM Grand Hotel and Casino in Las Vegas, Nevada. The hotel commenced operations in 1993 and was billed as the largest hotel and casino in the world. MGM Grand also owned New York New York Hotel and Casino in Las Vegas; Whiskey Pete's Buffalo Bill's and the Primm Valley Resort in Primm, Nevada; the MGM Grand Detroit Casino; the MGM Grand Hotel and Casino in Darwin, Australia.
MGM Grand also managed casinos in Nelspruit, Witbank and Johannesburg, Republic of South Africa. MGM Grand and Mirage Resorts merged together in 2000.In 2004, the company sold a hotel and casino located in Darwin, Australia to SKYCITY Entertainment Group. In 2005, the Nevada Gaming Commission unanimously approved the merger between MGM Mirage and Mandalay Resort Group.
During the same year, the company acquired Mandalay Resort Group for $7,900 million. In the following year, MGM Mirage started work on CityCenter, a $7,000 million project featuring a 60-story, 4,000-room hotel/casino; two 400-room, non gaming hotels; 500,000 square feet of retail shops, dining and entertainment venues; and luxury condominiums.In 2006, MGM Mirage sold its Colorado Belle and Edgewater hotel-casinos located in Laughlin, Nevada, to a group led by Anthony Marnell. In the same year, the company sold its Buffalo Bill's, Primm Valley and Whiskey Pete's hotel-casinos (collectively known as Primm Valley Resorts) located in Primm, Nevada to Herbst Gaming. Also in the same year, MGM Mirage and Mubadala Development Company of Abu Dhabi, UAE, signed a memorandum of understanding with the aim of creating a strategic relationship to pursue non-gaming related business opportunities.
MGM Mirage collaborated with the Diaoyutai State Guesthouse in 2007 at Beijing, China. The strategic relationship was formed to pursue non-gaming business opportunities in China. During the same period, MGM Mirage sold Buffalo Bill's, Primm Valley and Whiskey Pete's hotel-casinos (collectively known as Primm Valley Resorts) located in Primm, Nevada to Herbst Gaming. Later in 2007, MGM Mirage formed a new luxury resort subsidiary, MGM Mirage Hospitality, to pursue global opportunities for hotel brands.
During the same period, MGM Mirage and Kerzner International Holdings formed a 50/50 joint venture to develop a multi- illion dollar integrated resort property on the Las Vegas Strip. Further in 2007, the company signed a definitive agreement with Dubai World to form a long-term strategic relationship, wherein Dubai World invested approximately $5 billion in MGM Mirage consisting of a $2. 7 billion investment in CityCenter. In 2008, Forbes magazine named MGM Mirage one of the "Best Managed Companies in America," as part of its annual Forbes Platinum 400 list of top-performing large corporations.
Further in 2008, CityCenter collaborated with Control4 (an automation technology provider) to develop select resort suites.In the same year, Disney Theatrical Productions and Mandalay Bay launched the Mandalay Bay Theatre with a 1600-seat capacity features musicals, comedy headliners and Broadway shows. In the latter part of 2008, MGM Mirage and Asian Coast Development (ACDL) announced plans to develop the MGM Grand Ho Tram - Vietnam's first "Las Vegas style" integrated resort. ACDL will own and finance the project, and MGM Mirage will provide development assistance, brand equity and operate the five-star integrated resort property upon completion.
MGM Mirage entered into an agreement to sell its Treasure Island Hotel & Casino to Ruffin Acquisition, a wholly owned subsidiary of Phil Ruffin, in March 2009. In June 2009, MGM Mirage and New Giza for Real Estate Development - an Egyptian company building a luxury, mixed-use community near the base of the famous pyramids - announced plans to develop the MGM Grand New Giza. Kendall Law Group, led by a former federal judge and former U. S.
Attorney filed a lawsuit against MGM Mirage, in August 2009 alleging the company of securities violations related to public statements made by it between 2007 and 2009.The company changed its name to MGM Resorts International (MGM Resorts) in June 2010. In July 2010, MGM Resorts reached an agreement to sell four long-term ground leases and its respective underlying real property parcels at The Borgata Hotel Casino & Spa in Atlantic City, New Jersey to Vornado Realty Trust and Geyser Holdings for approximately $73 million. The company's subsidiary, MGM Grand Paradise, owner of the MGM Macau resort entered into a new senior secured credit facility agreement in August 2010 to raise $950 million for refinancing its existing senior secured credit facilities.
