KIRK KERKORIA PLANS A BIT OF A JOLT WITH PLANS TO TAKE PART OF MGM/MIRAGE PRIVATE

Implications: The plan by financial giant Kirk Kerkorian to make some serious changes to MGM/Mirage came out of the blue for most of the supposed in the know group. It has made their stock take a big hike closing just fractionally above $17.00 a share surge at $79.98 - regardless of how the board votes the boost at this time is significant. There is a good chance of this trend leveling off and returning a bit closer to the original price prior to announcing his intentions.

Analysis: Why now does Kerkorian wish to break up the MGM/Mirage with his bid to take part of the company private? It may stem from his recent tryst with Chrysler. He now wants to concentrate on a possible sure thing as he controls the major portion of stock in MGM. Though, he does not interfere with the day to day running of the company, his influence is unquestionably keen. Terry Lanni, Chairman of MGM/Mirage is the leader of the company and has control of the organization. He is tops in the field and has led the MGM for many years. Kerkorian leaves the daily decisions making in Lanni's capable hands. It would seem to the outsider, that with part of the company going private to Tracinda Group, Kerkorians private equity arm, will allow MGM more movement and take the financial burden of the CityCenter out of their hands. The suggestion has been made by K.K. that his plans would be for MGM/Mirage to actually run the Bellagio and CityCenter under a management agreement. Good deal for both side of this issue.

It also seems possible that after everything is said and done, that there may be an effort to drop some properties. The Mirage and TI come to mind. These properties are still in great shape and command their presence in the market. They are, however reaching their 18th birthday and could be easily be replaced in these scheme of things by the acquisition of the land on the north strip. Remember they have accumulated about 100 acres from Sahara Avenue south. There has been no tell tale signs as just what their plans are for this important parcel of land. Keep in mind that MGM does not build anything that is not top notch. The future growth possibilities for MGM/Mirage will be significant and no doubt this proposed move by Kerkorian may be the boost needed to take the company to bigger and better places. It's probably not as much of a gamble as it may seem - it should be a very special time in the life of MGM/Mirage.................