MGM MIRAGE, Peel plan U.K. projects

Monday, April 19, 2004 | 10:44 a.m.

SUN STAFF AND WIRE REPORTS

MGM MIRAGE and U.K. real estate developer Peel Holdings Plc today said they may build casinos in British cities including Manchester and Liverpool for $1.17 billion to benefit from a possible relaxation of gambling laws there.

The deal -- which represents among the largest number of potential casino sites under development by a U.S. casino operator in Britain -- would complement several other joint ventures MGM MIRAGE has struck with British firms to develop possible casinos in that country.

The move indicates that interest by U.S. casino giants in Britain hasn't waned even after "less than favorable" recommendations on pending gambling deregulation issued by a committee of Parliament last week, Merrill Lynch analyst David Anders said today.

Some analysts said the recommendations indicated that the final rules might not be as lucrative for casino operators as initially thought because of possible limits on the number of slot machines and potential restrictions on locations of major casinos, among other things.

Uncertainties about the timing of deregulation and casino taxes remain, Anders wrote in a research note to investors today. He also said it isn't clear how the costs of the projects would be split between the two companies.

MGM MIRAGE, based in Las Vegas, and Manchester-based Peel may also build casinos and entertainment complexes in Salford and Glasgow, the companies said in a statement.

The projects the companies anticipate building include:

A leisure complex on 125 acres of land known has Glasgow Harbor owned by Peel Holdings.

A multi-purpose center in East Manchester adjacent to the City of Manchester Stadium.

A 20,000-seat sports stadium, casino and hotel in Salford adjacent to the Manchester Ship Canal.

A leisure complex in Liverpool on land known as the King's Waterfront.

MGM MIRAGE would develop and operate the casinos on those sites.

MGM MIRAGE is looking to develop and acquire companies in the U.K. in case legal restrictions on gambling are eased. The company is also bidding to acquire Wembley Plc to gain dog tracks in London, Birmingham and Manchester.

A U.K. legislative committee recommended earlier this month that casinos be allowed to install more slot machines and end membership requirements.

"All of the projects that we have announced today, and others which we are still exploring, have the potential to result in unprecedented levels of inward investment, jobs and tourism for each of the locations we have chosen," MGM MIRAGE Managing Director in Europe Lloyd C. Nathan said.

Shares of MGM MIRAGE rose 45 cents to $44.94 in early New York Stock Exchange composite trading. They've risen 19 percent this year. The company owns casinos including The Mirage and Bellagio in Las Vegas.