Dubai company rolls dice on casino

LAS VEGAS -- A holding company for the Persian Gulf state of Dubai has laid down a big marker on the Las Vegas Strip -- a $5 billion investment that gives it a chunk of MGM Mirage and 50 percent of a massive entertainment complex the casino operator is building.

Dubai World will pay $2.7 billion for half of the 76-acre CityCenter complex under construction in the heart of the Strip and buy up to $2.4 billion in MGM Mirage Inc. stock, the company said Wednesday.

The investment gives Dubai its first step into Las Vegas and for MGM Mirage removes a significant debt load from the development of the $7.4 billion CityCenter.

MGM Mirage also gets access to Dubai World's Rolodex of wealthy clients that could purchase the new luxury condos at the site, and at premium prices, said MGM Mirage chief executive Terry Lanni.

"They are selling villas and condos to people we don't even know," Lanni said. "They're selling condominiums for four times per square foot than we are."

Along with acquiring 50 percent of CityCenter, Dubai World agreed to buy 14.2 million outstanding MGM Mirage shares at $84 per share, a 13 percent premium to the closing price of $74.32 on Tuesday. It would buy an additional 14.2 million newly issued shares at the same price, giving it an approximately 9.5 percent stake.

Dubai World made headlines last year when its subsidiary, Dubai Ports World, was forced to sell its U.S. port operations after an uproar in Congress over security concerns. Also, Dubai World this month signed an agreement for control of the Barneys New York department store.