Word: kerkorian
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Dealmaking seems to satisfy the gambler in Kerkorian, a man more at home in Las Vegas than in Hollywood. After World War II he bought refurbished planes to fly bettors from Los Angeles to the casinos. From that he developed a small airline, which he sold in 1968 in a deal that eventually brought him $104 million. That money helped him build and then sell ever larger Vegas hotels, a sequence he capped with the 1993 opening of the $1 billion MGM Grand, with its 5,005 rooms, 15,000-seat arena and 33-acre theme park...
Among Chrysler's top managers, some of whom question the wisdom of decisions Iacocca made for the company when he ran it, there is grumbling now that their former boss, susceptible to Kerkorian's unwholesome charms, is putting the company in jeopardy to satisfy his own ambition. "They are shocked and pissed,'' says one board member. "It's '80s greed vs. '90s forward-thinking management. Iacocca's involvement is really getting under people's skin.'' Certainly there's a prospect of money in the deal for him. For all his wealth-$200 million at last estimate-Iacocca has never been...
...says Eaton. "If you go through the numbers and look at the cash we went through the last time around--when we had a much lower capital-spending plan--we believe it's absolutely prudent to have that kind of cash [the $7.5 billion] around." The Kerkorian bid has already had one negative impact on the company's ability to borrow. Reasoning that any takeover could leave the company saddled with unmanageable debt, all three credit-rating services quickly placed Chrysler's outstanding debt on their watch lists...
Debt doesn't scare Kerkorian. There is always something you can sell to pay it off. After he bought MGM in 1969, he sold off the studio's choicest assets, from its immense library of old films to warehouses filled with props and other paraphernalia. Later he added United Artists, but for him it has always been the deal, not the business. In one famous Ping-Ponging transaction, he sold MGM/UA to Ted Turner for $1.5 billion in 1986, then bought back everything but the film library for less than $800 million, and then sold it all again...
...wonder the local Kublai Khans are planning more. Treasure Island's Steve Wynn, who also owns the tony Mirage, is ready to break more banks with his new Beau Rivage resort next year. The Grand's Kirk Kerkorian, when he's not plotting his takeover of Chrysler, looks at plans for his new hostelry, New York-New York, whose facade will be in the shape of the Manhattan skyline. Even the Walt Disney Co. is rumored to be looking at Las Vegas property-though Disney chairman Michael Eisner denies any interest in bringing Disney to Vegas...