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If anyone knows the value of holding all the cards it is Kirk Kerkorian. The Las Vegas billionaire’s 56 per cent stake in MGM Mirage gives him just that as he explores potential deals.

Mr Kerkorian, sensibly enough, seems to want the best of all worlds. He is negotiating to take private MGM’s two prime assets: the well-known Bellagio hotel and casino and City Center properties, a huge Las Vegas development that will be ready in 2009. He then appears ready to do a deal involving the remainder of MGM. That is likely to be a sale of some description (potentially leaving him with a stake). Or he could try taking the whole group private.

The process should unlock value for MGM shareholders. The casino sector is red-hot, attracting strong interest from private equity because of the cash flow characteristics and underlying property values. It is no wonder the shares, which had already almost doubled since September, jumped 27 per cent on the news.

That said, while minority investors should enjoy the ride, Mr Kerkorian will reap the biggest winnings. He knows the assets extremely well. Presumably, if he buys the Bellagio and City Center, it will be at a fair price. That is not necessarily the same as the best price that could be reached in a straight auction.

Even if nothing happens, Mr Kerkorian’s minimalist and opaque statement about his intentions should keep MGM shares higher, having served as a reminder of the potential value in the group. But a transaction is clearly the most likely outcome.

It is just a shame that Mr Kerkorian has not said that he will sell the whole of MGM, for the benefit of everyone, if the right bid comes along.

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