Lion leaps at Mirage

MGM Grand acquires Resorts in $6.4 bil buy

LAS VEGAS — Less than a week after rejecting MGM Grand’s proposal to acquire Mirage Resorts, the Mirage board has accepted a sweetened buyout offer.

In a deal worked out over the weekend — the largest consolidation in the gaming industry — MGM Grand will acquire all Mirage Resorts stock for $21 per share, up from its first offer of $17 per share.

The total equity value of the deal is $4.4 billion. In addition, MGM will assume outstanding Mirage debt of about $2 billion, bringing the total value of the transaction to $6.4 billion.

The merged entity will own some of the most striking and high-profile assets of the gambling and hospitality industry, including Mirage’s $1.6 billion Bellagio resort and MGM’s 5,005-room MGM Grand hotel-casino, the largest hotel in America.

In addition, MGM owns the New York-New York resort, properties in Primm, Nev. and casinos in Detroit and Darwin, Australia.

Mirage also owns the Mirage, Treasure Island and Golden Nugget resorts in Las Vegas, the Beau Rivage in Biloxi, Miss. and the Golden Nugget in Laughlin, Nev.

The purchase is subject to approval of Mirage shareholders and government regulators. The transaction is expected to be completed during the fourth quarter of this year.

The stage was set for the purchase earlier this year when Mirage stock dropped from a high of $26 per share last year to $11 in February. Investors had been concerned about poor performance of Mirage’s two newest resorts — the Bellagio in Las Vegas and the Beau Rivage in Mississippi.

Mirage board chairman Steve Wynn reportedly will not be involved in the new entity.

MGM Grand chairman and CEO J. Terrence Lanni, told Daily Variety Monday that “Mr. Wynn did not ask to have a position in the new company, nor did we offer him one.”

Lanni continued that Wynn “will be successful at whatever he decides to do.”

Wynn, who owns 12% of Mirage Resorts, will walk away from the deal with nearly half a billion dollars.

Lanni also said that MGM Grand hopes to keep the current management of Mirage Resorts and has no plans to sell Mirage strategic assets such as hotels or casinos. He did say that property such as aircraft and residential real estate may be sold.

Mirage stock closed Monday at $18.56, up $2.69.

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