Missing Lady Luck
There was a time not so long ago when “smart” investors and analysts believed that casinos were a sure bet, that gambling was recession proof, and that it was a vice people could not shake off even if money got tight. And so casino giant after casino giant started on mega projects that set to outdo each other and make glitzy Las Vegas, well, glitzier.
This recession is changing several of those plans. And despite the retirees putting their life savings into slot machines for fun in Atlantic City, casinos are taking a hit.
MGM Mirage, one of the biggest of them all, is trying to come up with funds amid a sharp downturn. The company, which is controlled by billionaire Kirk Kerkorian, is hoping to raise money to meet debt payments and also to fund CityCenter, a troubled project it jointly owns with Dubai World, in Las Vegas.
The No. 2 U.S. casino operator has hired Morgan Stanley to sell two resort-style properties – one each in Detroit and Biloxi, Mississippi. Los Angeles-based private equity firm Colony Capital is also considering an investment in the debt of the casino company.
Will Lady Luck smile again on Las Vegas? Chances are Sin City will look different again in a few years, with or without her.
DEALS OF THE DAY
* Russia’s Gazprom signed a $4.2 billion deal to reacquire a stake in its oil arm from Italy’s Eni but delayed the buy-back of Russian gas assets from Italian companies to end April.
* About half a dozen investment managers have put forward bids, ranging between $400 million to $800 million, for troubled insurer American International Group’s asset management business, the Wall Street Journal reported.
* French environmental and transportation giant Veolia is close to a deal for a stake in Hong Kong’s iconic tram system, according to a person with direct knowledge of the situation.
* British condom maker SSL International said it would exercise its planned to buy a further 35 percent of BLVB, a condom distributor operating in former Soviet Union countries except Ukraine, for 63.5 million pounds ($94.74 million).
* Summit Germany Ltd said it agreed to be acquired for 57.8 million euros, or 21 cents per share, by Israel’s Summit Real Estate Holdings Ltd, representing a 71 percent premium to the stock’s Monday closing price.
* British interactive gaming firm NetPlay TV Plc said Virgin Media Television had agreed to buy options to acquire 9.9 percent of NetPlay’s shares at a strike price of 18 pence per share.
* Nigeria’s First Bank said it has approved fresh merger talks with Ecobank Transnational Inc, reviving a plan that could create one of sub-Saharan Africa’s biggest lenders.
(Photo: The construction site of the CityCenter project in Las Vegas. REUTERS/Mario Anzuoni)