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Mirage Resorts rejects MGM Grand takeover bid

$55 bil proposal nixed, but board willing to deal

LAS VEGAS — The board of directors of Mirage Resorts has rejected MGM Grand’s proposal to acquire Mirage for $55 billion — or $17 a share.

Mirage directors called the MGM Grand offer opportunistic, noting that it coincides with a low point in the historical valuation of gaming companies and of Mirage in particular.

The Mirage board said its financial advisers and its legal counsel feel the proposed takeover would not serve the best interests of its shareholders.

The board nonetheless indicated a willingness to consider a sweetened offer from Kirk Kerkorian-owned MGM Grand that would “fairly reflect the long-term values” of Mirage properties.

Discouraging takeovers

To discourage unwanted takeovers, Mirage also adopted a so-called share purchase rights plan, which gives existing shareholders the right to buy newly issued preferred stock if an outside party buys 10% of the company’s common stock or makes an offer for that amount of stock.

The plan, which goes into effect March 20 and lasts for 10 years, is meant to encourage potential buyers of the company to negotiate with the board instead of launching a hostile takeover.

Mirage stock closed Wednesday at $15.94, up 19¢.

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