Wynn says Kerkorian’s purchase not unfriendly

Christina Binkley

Friday, Sept. 17, 1999 | 11:20 a.m.

Kirk Kerkorian has bought a stake in Mirage Resorts Inc., Mirage Chairman Steve Wynn confirmed.

The billionaire investor Kerkorian controls MGM Grand Inc., one of Mirage's competitors for the world's biggest high-rolling gamblers.

Kerkorian has bought less than 5 percent of the company and isn't seeking control, Wynn said in an interview. "I asked him about it. I said, 'are we going to do something unfriendly here?' And he says, 'absolutely not,"' Wynn said. "He says, 'How can you not buy the stock at that price?,"' Wynn said.

Wynn, who said he owns about 12.5 percent of Mirage shares, said his old tennis partner didn't notify him before making the purchases and didn't divulge the size of his investment in Mirage shares.

Kerkorian couldn't be reached for comment.

Some on Wall Street said they don't expect Kerkorian to remain a passive investor.

"He's not one to sit around if the stock price is languishing," said Jason Ader, an analyst with Bear Stearns. "That's not how he became a billionaire."

Ader noted that another investment of Kerkorian's, in the former Chrysler Corp., became a battle to control the auto manufacturer.

Mirage shares have been trading near their 52-week low as the company struggles with slower-than-expected business at its new Biloxi, Miss., casino, called Beau Rivage.

In addition, its new $2 billion Bellagio casino has been taking business away from other Mirage Resorts properties in Las Vegas, according to analysts who follow the company.

Last week, Mirage's longtime chief financial officer, Daniel Lee, resigned suddenly, surprising analysts and investors. Lee said he wants to start a business of his own.

The run of troubles could make Mirage a target, say some who follow the company.

"We estimate the assets of Mirage are worth well in excess of $6 billion," Ader said. "The enterprise value is about $4.7 billion. Which is probably the same math Kerkorian is doing."

Mirage shares rose $1 to $15 Thursday, apparently on word of the Kerkorian purchases.

The Associated Press reported Kerkorian bought a 4.9 percent stake in Mirage.

Alex Yemenidjian, president of MGM Grand and chairman and chief executive officer of Kerkorian's Metro-Goldwyn-Mayer Inc. in Santa Monica, Calif., told AP the stock purchase "was made for investment purposes only."

Anyone buying more than 5 percent of a public company must file notice with the SEC.

Wynn also told Bloomberg News that Mirage isn't for sale.

Wynn said he's not interested in selling his company and that he could thwart any hostile takeover attempt.

"You can't buy Mirage," he told Bloomberg.