Dubai World raises stake in MGM Mirage

NEW YORK (Reuters) - State-owned investment company Dubai World said on Friday it bought 5 million shares of MGM Mirage, the world's No. 2 casino company, raising its stake to 6.5 percent.

Dubai World, which is seeking to become a high stakes player on the Las Vegas Strip, paid $424 million, or $84.80 each, for the shares, according to a U.S. Securities and Exchange Commission filing.

The seller was the Lincy Foundation, a charity founded by billionaire investor Kirk Kerkorian, whose Tracinda Corp holds more than 51 percent of MGM Mirage shares.

The purchase price in the deal, which was consummated on Monday, is slightly higher than Thursday's closing price of $84.25 and above the $84 that Dubai World offered in an October tender offer.

MGM shareholders largely spurned the tender offer, tendering only 348,838 of the 14.2 million shares Dubai World sought.

Dubai World had earlier bought 14.2 million shares from the casino developer as part of a deal announced in August that included Dubai World's acquisition of a 50 percent stake in MGM Mirage's CityCenter project in Las Vegas for about $2.7 billion.

In the SEC filing, Dubai World said it plans to nominate a director to serve on MGM Mirage's board once it receives authorizations from gaming authorities.

(Reporting by Chris Reiter; Editing by Steve Orlofsky)