Gambling is considered illegal in Dubai, yet Dubai’s state owned investment company, Dubai World, bought a piece of Las Vegas on Wednesday, announcing an investment of US$5 billion in MGM Mirage.
Dubai World, the state-owned investment firm in this fast-growing Persian Gulf emirate, will pay US$2.7 billion to acquire a 50 percent stake in CityCenter, a 76-acre urban metropolis with upscale hotels, condos and retail to open by 2009.
The transaction also includes up to $2.4 billion in stock purchases, giving Dubai World an approximately 10 percent interest in MGM. Some of the shares will be purchased through an $84-a-share tender offer, a 13 percent premium to Tuesday’s closing price of $74.32.
The company, owned by the ambitious ruler of Dubai, Emirates’ Vice President and Premier Sheik Mohammed Bin Rashid al-Maktoum, also intends to acquire an additional 14 million shares from public shareholders, the company said Wednesday.