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LAS VEGAS-Nearly 102 million shares of MGM Mirage common stock were tendered in response to the 15-milion-share joint tender offer by MGM Mirage and Dubai World that expired Thursday evening, according to a Friday morning announcement by MGM Mirage. Per the offer, the duo will acquire only the 15 million shares, with Dubai World subsidiary Infinity World (Cayman) LP getting 6.5 million shares and MGM getting 8.5 million shares.

Based on the preliminary count, subject to final verification and conditional tenders, 101.9 million shares of MGM Mirage common stock were tendered, including 19.2 million shares that were tendered through Notices of Guaranteed Delivery. Once the results are verified, the depositary will issue payment for the shares validly tendered and accepted under the joint tender offer and will return all other shares tendered. The per-share purchase price is $80, which equates to a total purchase price of $1.2 billion.

In January, the duo increased their joint Dutch tender offer to 15 million shares from 10 million shares and set the price at $80, which was the top end of the range announced one week earlier. The price is 20% higher than MGM Mirage’s closing share price on Tuesday, Jan. 15, and 12% higher than yesterday’s closing price of $70.37. Shares were down to $66.72 in noontime trading Friday.

As of Jan. 15, the 15-million-share acquisition goal represented approximately 5.1% of total shares and 12.5% of the free float, which is the number of unrestricted shares not held by large owners like Kirk Kerkorian (Tracinda Corp.), who as of early January controlled 52.4% (153.8 million) of MGM’s outstanding shares. Kerkorian in December sold Dubai World five million shares of MGM stock via his charity, the Lincy Foundation, but has said he will not tender any shares as part of this upcoming offering.

When the 15-million-share transaction is complete, MGM’s outstanding share count will fall from approximately 293.7 million to approximately 285.2 million, lifting Dubai World’s ownership from approximately 6.7% to approximately 9.8%.

JP Morgan gaming analyst Harry Curtis, in a note to clients the day the original tender offer was announced said investors with a longer-term view “who agree with us that MGM’s longer-term value could be in the $110 to $170 range, will likely see this as affirmation of MGM’s longer-term value and choose not to tender stock. However, we believe those who are more concerned about short-term trends, the economy, consumer outlook and operating trends through 2008 may want to take the opportunity to tender stock.”

Under its original agreement with MGM Mirage, Dubai World was to acquire a 50% stake in MGM Mirage’s multibillion-dollar Citycenter development on the Las Vegas Strip and at least 28.4 million common shares (9.5%) of the company, half directly from MGM Mirage and half from shareholders via a tender offer. While its investment in Citycenter and its direct share purchase went off without a hitch the tender offer failed, attracting only 350,000 shares because MGM’s share price jumped several dollars above the $84-per-share tender offer, leaving Dubai World well short of its minimum goal and out of sight of its maximum goal of a 20% stake. If this latest tender offer is successful, Dubai World will own approximately 28 million shares.

MGM Mirage, the largest landowner on the Las Vegas Strip, owns and operates 17 properties located in Nevada, Mississippi and Michigan. Its $7.4-billion Citycenter development, scheduled to open in November 2009, includes a 4,000-room resort casino, 2,650 condominiums in multiple towers, two 400-room non-gaming hotels and 470,000 sf of retail and entertainment space. In addition, the company has major new developments under construction in Nevada, Michigan and Macau S.A.R., and is planning another massive integrated resort at Sahara Avenue and the Las Vegas Strip with Kerzner.

Dubai World is a major investment holding company with a portfolio of businesses that includes DP World, Jafza, Nakheel, Dubai Drydocks, Maritime City, Istithmar, Kerzner, One & Only, Atlantis, Barney’s, Island Global Yachting and Tamweel. Its real estate projects include Nakheel’s Palm and World developments as well as real estate investments in the US, the UK and South Africa. The conglomerate has developed 80,000 luxury residential villas and apartments and approximately three million sf of retail space.

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