King of Vegas
The ageless Kirk Kerkorian leads a wave of private money into the latest transformation of the desert playground
From the Print Edition:
Richard Branson, Sept/Oct 2007
(continued from page 3)
In effect, the need to go to Wall Street has become moot. In the new scheme of things, tapping the public market feels like an antiquated, disadvantageous way of raising money. When you consider the drawbacks of having to report to impatient stockholders on a quarterly basis—and the mega profits that can be realized by doing it on your own—going the private equity route brings palatability to the arduous scrutiny that comes with getting licensed to own a casino. "So now, if the public shareholders don't give respect to the publicly traded casino companies, and bid the prices up to a certain amount, these guys will come and take it," continues Marnell, pointing to Harrah's and Station as prime examples, and a harbinger of what's to come. "They say, 'Fifty dollars a share? Seventy-five dollars a share? No thank you. I think this company is worth more, and now I will buy it. Then you can take the money and go home.'"
Echoing Murren, who's seen aerial photos of the Strip adorning investment-banking boardrooms, Marnell concludes that good old-fashioned capitalism is driving the vertigo-inducing action. "There is way more demand than we have supply," he says. "There are way more people who want to come in and take ownership of these things than there are businesses to be bought."
And that leaves Kirk Kerkorian in the catbird seat. The scuffler and amateur boxer, turned professional pilot, who morphed into the greatest casino mogul of our time, sits quietly atop the jewels of Las Vegas. He rumbles a little bit, and billions of dollars in equity rise up from the ground. Notoriously big-picture, physically fit, mentally sharp and still turned on by the challenges of making deals in the desert, he seems invincible, regardless of what he chooses to do with the company he controls, and oblivious to his already encroached old age. "Mike Milken says that 90 is the new 70," muses Terry Lanni. "But in Kirk's case, I think 90 is the new 40. In fact, forget about his age. Kirk doesn't look at things that way. He'll be here 20 years from now and will probably have the best vision of what Las Vegas will be."
Michael Kaplan is a Cigar Aficionado contributing editor.
You must be logged in to post a comment.