Today's Wall Street Journal reports that Kirk Kerkorian has dropped his plans to acquire two of MGM Mirage's (NYSE: MGM) gems, the Bellagio Hotel and the $7.4 billion project City Center, opting instead for a joint venture with Sol Kerzner to create a multi-billion dollar resort at the north-end of the Las Vegas strip.

That news today sent MGM shares down more than 10% in pre-market trading. The stock currently sits at $80.97, down 6.4% this afternoon.

Kerkorian's announcement to acquire the Bellagio and City Center last month seemed to put all of MGM in play, with the company forming a special committee to advise management on how to proceed. Shares of MGM Mirage -- which Mr. Kerkorian owns a 56% stake in -- have jumped as much as 27% since last month's offer.

The real question: Is MGM Mirage still a takeover target? There are a number of analysts who remain convinced that MGM is a prime candidate, possibly by private-equity players looking for land deals. MGM owns a third or more of the Vegas Strip and the land could fetch a pretty penny -- BMO Capital believes a successful bid for MGM could be worth more than $100 a share.

But what about Kerkorian? Dana Cimilluca, a writer for the WSJ, considers Kerkorian's decisions a sign that it may be time for him to retire. She says that Kerkorian has now swung and missed three times: The unsuccessful attempt to ally with another auto maker--General Motors (NYSE: GM), the failed Chrysler (NYSE: DCX) bid and now the retreat from MGM's two gems.

That may seem harsh, but hey, the man is 90.

Kirk Kerkorian's Tracinda Corp. has dropped its attempt to cherry-pick MGM Mirage's Bellagio and CityCenter properties after the corporation announced a new deal with Bahamas casino owner Sol Kerzner to build a multi-billion dollar casino complex on the Strip in Las Vegas.

Many thought that Kerkorian's intention was to nudge MGM Mirage (NYSE:MGM) onto the sale block, to see what his 56% of the remaining company assets might fetch in a buyout-friendly climate. The latest deal, with its implications for increased debt and holdings value, apparently caused him to rethink this move, at least for the moment.

MGM Mirage already has a huge footprint in Las Vegas, but remains very aggressive (i.e. carrying a considerable debt load) in pursuing further growth. Its new $725 million Detroit casino is scheduled to open late this year. The CityCenter complex in Las Vegas has tied up $7.4 billion and won't be ready until 2009, and MGM has put another $1 billion into a cooperative venture, MGM Grand Macau, opening later this year. It is also in talks about another huge development on the Cotai strip in Macau.

Those punters who jumped on the bandwagon at the initial announcement of Kerkorian's interest in Bellagio are jumping back off this morning. MGM Mirage stock was down more than 10% in early trading.

After dueling with Daimler and losing again, Kirk Kerkorian has decided to take on someone his own size: himself. In a move that has analyst's opinions all over the map, Kirk Kerkorian's Tracinda Corporation announced it will negotiate with MGM Mirage (NYSE:MGM) for its two best properties. The Bellagio and the under-construction CityCenter could fetch as much at $12 billion.

The odd part of the story is that Kerkorian owns 56% of MGM Mirage. Other stockholders are not responding well to what they perceive as an attempt to cherry-pick the company's assets, questioning Kerkorian's motives. Some suggest he is trying to force the company onto the sales block, drooling at the potential price in light of Harrah's recent $17.1 billion sale.

He could also be hoping to play both ways; strip off the most lucrative assets, then hope the remaining package is still alluring enough to draw venture interest. Left on the table for the moment is MGM's Grand Macau, possibly signaling Kerkorian's uncertainty about that market.

A key part of this deal is MGM's CityCenter development, a casino-retail-hotel- condominium complex that will cost an estimated $7.9 billion. With the recent cancellation of other Vegas high-roller condo developments, CityCenter is either well poised to take advantage of the Vegas property boom or vulnerable to the slackening housing market. Probably the former.

The market has shown love for the idea, so far, jumping up 30% by midmorning on the news.