Mirage NOT to be sold

According to Jim Murren during this morning's MGM earnings call "The Mirage is not on the market."
Now, it's possible it's not on the market because it's already sold, but more likely this was just a rumor and it's not happening.

 

May an MGM rumor to see what the market is?

 

According to Jim Murren....

"But Murren denied recent speculation that MGM is about to sell the Mirage. Though the Vital Vegas blog and the Las Vegas Advisor both wrote last week about a sale of that property, Murren said on the conference call that “the Mirage is not on the market.”

From Vegas Inc

http://vegasinc.com/business/gaming/2015/aug/04/mgm-resorts-revenue-drops-76-percent-2nd-quarter-c/?_ga=1.7159794.1758239148.1400885130

 

You can truthfully say something is not on the market if you've already got a buyer lined up, though, right?

 

My thought exactly lol..

 

That's the game, yep!

 

I was hoping a no sale was more clear...bah. Guess I'll keep waiting.

 

Translation: the deal fell through.

 

"Truthfully", yes, but considering they're a public company it'd be risky; in addition, he was specifically addressing the reports that Mirage was being sold, as opposed to just speaking in the abstract. Much safer to just not comment if there is, in fact, a transaction contemplated or underway.

 

Or... maybe the Mirage is a respected and profitable casino that attracts mid-rollers and MGM wants to keep the business?

 

It could be the kiss of death like in professional sports when the GM makes the statement of confidence and standing behind the coach when the team is doing crappy and then 2 weeks later the coach gets the ax.

 

the way he phrased that is vague enough to leave all options open.

they sell, "it wasn't on the market, but we got a great offer".

they don't sell, "it was never on the market anyway".

it's the same way trade rumors are quashed in the pro sports world.

 

Everything's for sale. Whether MGM is marketing it is another story.

 

I don't know if this is just my wishful thinking but the CEO didn't really need to comment on this at all. If the property is being sold, he could've just ignored the subject altogether but he chose to say it's not for sale. Therefore, I lean towards that it's actually true, it's not being sold.

 

I hope it is not for sale as it is our favorite place with the best host I have ever had.
We are just so comfortable there and enjoy it so much

 

Bingo. The fact that a rumor snowballed into a CEO response, there was something happening that obviously didn't transpire. If there was zero activity to begin with, Murren wouldn't have commented.

Nick

 

Agreed. It shouldn't have taken a week for a reponse, especially since the rumor hit the mainstream press.

 

My house is "not on the market", but if someone knocked on the door with a decent offer, I might sell it.


"Not for sale" and "not on the market" can easily be two different things. He said "not on the market".

I would agree though, that the chances are there is no deal. Might have been one, but not now.

 

I have never known a company to not consider selling an asset, unless that asset was key to the growth strategy and making double digit annual growth rates.

So I think what he may have been saying is MGM is not actively marketing their properties. There's a huge difference, since typically just to have a conversation with prospective buyers it has to
go thru an executive committee. Then they have to establish an intial term sheet. Next you have a period of due diligence prior to agreeing to a final bid submission. Finally you have all
the little details to reach signing.

Example I have seen deals go south where the bid price was agreed, but broke down on employee transition. Basically where the corporation selling the asset wants the buyer to assume X% of headcount at same level of pay and benefits, but the overhead is out of step with the revenue and growth targets. This is pretty common place when buyers are leveraging an equity firm to help fund the deal. So my best guess is a deal was in the works under a non disclosure agreement or exclusivity agreement, and it broke down in the final throws.

It's amazing how things are made to look good in corporate accounting for 10K and 10Q filings, but a buyer looking closely at the cash flow and liabilities might see something as a hindrance to growth for an asset they want to purchase.

 

Yes, my former employer had agreed to be acquired by Goldman Sachs but the deal fell through once GS started looking at the books and assets. They turned tail, paid a couple million in fees, and walked away rather than go through with the purchase.