Kirk Kerkorian is a native Californian born in Fresno to an immigrant Armenian couple. Some of Kerkorian's jobs included hustling newspapers, working in a CCC camp, and then he bought and sold used cars.
Kerkorian took up boxing and thought to have a better than average chance of succeeding in the ring but he had a love of flying. He took lessons and became a flight instructor for the United States Army during World War II. He then began ferrying planes to England for the Royal Air Force.
After World War II, the United States government began offering surplus aircraft for rock bottom prices and especially in Hawaii, the planes were dirt cheap. Kerkorian scraped together every dollar he could and made purchases in Hawaii, ferrying the planes to the mainland himself.
Rumor has that he was once flying a DC-3 and experienced engine trouble, threatening to go down midway across the Pacific. He safe landed the plane in California and after touchdown was said to have coolly shrugged off the near ditching.
The planes he purchased became a small supplemental cargo and passenger airline called Trans International Airlines. He was the first supplemental airline owner to buy a jet when everyone else was still flying piston planes. That purchase made the difference.
One of Kerkorian's clients to fly people and celebrities to Las Vegas, and specifically the Strip in the late 1940s, was William Moore, one of the founders of the Last Frontier. Maybe it was during one of these flights that Kerkorian's dreams of the Strip started to form.
In either 1960 or 1961, Kerkorian purchased 34 acres of land on the northwest corner of the Strip and Flamingo Road. In 1962, he sold the property to Jay Sarno for the building of Caesars Palace.
Kerkorian sold his Trans International Airlines to Transamerica. With that money he decided to join the resort game instead of just owning land. Kerkorian purchased the failing Flamingo in 1967, for $13 million, demolished the legendary champagne tower, added a 300 seat theatre, expanded the casino, and housed it behind a new two-story porte cochere.
In 1968, he purchased the ill-fated Bonanza Hotel & Casino property which was located across the street from The Dunes but sold it a short while later to Howard Levin.
In the late 60s/early 70s, Kerkorian acquired the controlling interests in both Western Airlines and Metro-Goldwyn-Mayer (MGM) and was being titled as a self-made millionaire, shrewd business man, and not someone that can be conned.
He decided to build what some call his mini-dream. He purchased 64.5 acres of land on Paradise Road, next to the Las Vegas Convention Center to build the largest resort in the world at that time - the $60 million, 30 story, 1,519 room International which opened on July 5, 1969.
Research shows that in 1970 he had the ultimate dream. A resort named after MGM Studios. He sold the Flamingo and the International to the Hilton Hotels Corporation, and re-purchased the Bonanza Hotel & Casino, and 43 acres of property surrounding it. On December 23, 1973, the MGM Grand Hotel opened. This was the flagship for other MGMs (some of which opened in Reno in 1978, and Atlantic City in 1980).
On November 21, 1980, Kerkorian's dream went up in smoke when the MGM caught on fire and 85 people perished. He rebuilt the MGM Grand but the resort would always be associated with sadness and death. He sold it in 1985 to Bally Entertainment Corporation for $550 million.
In 1981, Kerkoridan purchased United Artists, merging it with MGM to create MGM/UA Entertainment Co.
In 1985, Kerkorian sold MGM Studios and the movie rights to Ted Turner.
Kerkorian purchased the Desert Inn in 1987, making it the MGM Desert Inn, and in 1988 he purchased the Sands naming it the MGM Sands.
Also during this year he created MGM Grand Air which was a luxury charter airline operation that catered to entertainers, sports franchises, and groups world-wide.
In 1989, Kerkorian sold the Sands to Sheldon Adelson and the Interface Group. During this year he also bought the Marina Hotel and Casino renaming that the MGM Marina.
As it is quite evident from the name changes, his MGM Grand was never far from his mind. Some dreams never die and the megaresort with the lion logo needed to become a reality again. On November 30, 1990, the Marina was closed and on October 7, 1991, ground breaking occurred.
On December 18, 1993, the $1 billion, 5,005 room dream became a reality and the MGM Grand Hotel/Casino was, and is, the largest hotel in the United States. During this year ITT-Sheraton purchased the Desert Inn from Kerkorian's Tracinda Corporation for $160 million.
In 1996, Kerkorian caused trouble with the Chrysler company regarding stock options that he had.
In January of 1997, MGM Grand Hotels and Prima Dona Resorts opened the New York New York Hotel Casino across the street from the MGM Grand. The property was owned by MGM Grand and the Prima Dona was the designer and operator. In 1999, MGM Grand bought the Prima Dona Resorts making New York New York the sole property of MGM Grand Hotels.
On February 24, 2000, Kirk Kerkorian (83 years old) and MGM Grand Inc., conducted a $5.4 billion takeover offer to purchase Mirage Resorts, Inc. Kerkorian is offering $17 per share for Mirage Resorts, either all in cash or a combination of $7 per share in cash and $10 worth of MGM stock, a bid worth about $3.28 billion. MGM would also assume Mirage Resort's $2.1 billion debt.
Just four hours after the announcement Mirage shareholders filed a class action lawsuit against Mirage, Chief Executive Steve Wynn, and six board members in the Clark County District Court to obtain the highest possible price for their stock. The plaintiffs consisted of Crandon Capital Partners, Richard Ardezzone, Janis Zvokel, Naline Yassin and J.M.M. Management.
The shareholders were worried that Mirage Resorts may not give the offer and others a fair hearing because the board members may lose their management grip should the company be sold. If Mirage Resorts is sold, the present management maybe out of a job. It is reported that MGM's offer may just be a low bid Kerkorian, and the plaintiffs are attempting to obtain the highest price.
It has been alleged that Mirage Resorts board members have breached their fiduciary duty to maximize shareholder value by wrongfully refusing to properly consider a bona fide offer, one that represents a substantial premium over the market price for the company from MGM Grand.
Mirage did not rejected MGM's offer and the proposal will be considered by the board at a future meeting.
If Kerkorian obtains Mirage Resorts, MGM Grand would to create a huge share of the high-end market. The "financial might" of MGM-Mirage, as MGM Grand President Jim Murren has called it, would make it extremely difficult for competitors to catch up.
On February 25, 2000, Wall Street analysts and Las Vegas casino observers were guessing Mirage Chairman Steve Wynn's next move. Though Wynn may begin negotiating a higher price with MGM Grand, Wall Street is buzzing with talk of new bids for the Las Vegas company including Harrah's Entertainment, (Harrah's and Rio), or Park Place Entertainment, (Flamingo Las Vegas, Bally's, Las Vegas Hilton, and Caesars Palace).
Wynn, being a Vegas long-timer and a business gambler, has some on Wall Street speculating he would take the risky move of taking Mirage Resorts private in a leveraged buyout, and that Carl Icahn, owner of the Stratosphere hotel-casino, might be willing to help him.
Harrah's is the most widely discussed competitor given the company's lack of a large presence on the Strip, and its need for a high-end portfolio. Another significant factor is Wynn's friendship with Harrah's Chief Executive Phil Satre, raising the possibility if Wynn seeks a white knight, he would approach Harrah's. Harrah's is interested in acquiring additional Las Vegas Strip capacity and has been considering an expansion at the Rio.
Park Place is seen as less of a possibility, since it is trying to digest its $3 billion purchase of Caesars World Inc. Another problem is the rivalry between Wynn and Park Place Chief Executive Arthur Goldberg. Still, analysts and observers insist Park Place cannot be totally dismissed.
Some speculate Icahn would be willing to be Wynn's partner. Icahn is licensed, so he and Steve Wynn could form an alliance. There is speculation that Icahn is using the Stratosphere to get his foot on the Strip so he could get his license and start dealing. Others downplay the Icahn possibility, saying it isn't in keeping with Icahn's reputation as a "bottom-fisher." Icahn is adding to his casino portfolio, but he's bought most out of bankruptcy, and Mirage is not a distressed corporation.
Some argue that Wynn will simply tell the world that Mirage Resorts is not for sale, as he did when Kerkorian took a stake in Wynn's company in 1999. Analyst, Joe Coccimiglio of Prudential Securities, has predicted that's probably what will happen, saying the odds of a buyout by MGM Grand are less than 25%.
Another problem is with the Strip's other major players who simply can't afford to let MGM Grand swallow Mirage Resorts. This may force the Strip's other major companies to enter the fray, should MGM Grand and Mirage Resorts begin dealing.
On March 6, 2000, it was announced that Mirage Resorts has been sold to Kirk Kerkorian/MGM Grand for $4.4 billion in cash. The assets range from Mirage's $1.60 billion Bellagio resort to the MGM Grand, the national's largest hotel. MGM also assumes $2 billion in Mirage debt. MGM executives agreed to the current deal after the stock market closed on March 3, 2000, and intensive negotiations continued through the weekend on details. The transaction must be approved by Mirage stockholders and is expected to close by the end of the year.
Steve Wynn, visionary of the Mirage, owns 23 million shares of Mirage stock or 12% of the company. The deal will bring him $483 million.
It is expected the new company will retain the MGM name. The combined companies will include 14 properties. Mirage owns the Bellagio, Boardwalk, Mirage, Treasure Island and Golden Nugget resorts in Las Vegas; the Beau Rivage in Biloxi in Mississippi, and the Golden Nugget in Laughlin, Nevada. The company also owns half interest in the Monte Carlo hotel-casino on the Strip.
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Some dreams can be recreated.
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