LAS VEGAS – Mandalay Resort Group directors have said yes to MGM Mirage’s $4.8 billion cash buyout in a deal that would unite two of the world’s biggest gambling companies and bring some of the most famous Las Vegas Strip properties under a single owner.
Now the gaming giants must persuade regulators to take a gamble on such a behemoth casino combination.
Jim Murren, MGM Mirage’s president and chief financial officer, said his company’s board was satisfied antitrust issues would not derail the deal as regulators began vetting it.
The board of Mandalay Resort Group Inc. approved the MGM Mirage Inc. offer after a seven-hour meeting that ended late Tuesday.
MGM Mirage’s board approved the proposal earlier Tuesday after an exhaustive presentation to directors that lasted almost four hours.
Mandalay shareholders will get $71 a share for their stock under the deal. MGM Mirage will also assume $2.5 billion in Mandalay debt and $600 million in bonds that can be exchanged for stock in the company.
Any such transaction would take months to complete. The deal must be reviewed by the Federal Trade Commission and gambling regulators in states in which the companies own casinos.
The deal would create a company with more than $6 billion a year in revenues and 28 casinos in Nevada, Mississippi, Michigan and Illinois. MGM Mirage also owns 50 percent of the Borgata hotel-casino in Atlantic City, N.J.
It would be the biggest merger between gambling companies ever, surpassing Kirk Kerkorian’s $4.4 billion buyout of Steve Wynn’s Mirage Resorts in 2000.
The two Las Vegas-based companies have been in friendly negotiations that unraveled Friday after MGM Mirage requested a 15-month option to pull out of the deal while retaining strategic control over Mandalay during the time period.
The companies regrouped over the weekend and salvaged the deal that will establish the largest casino company in the world and dominate the Las Vegas Strip with 11 properties.
With the merger, the 87-year-old Kerkorian, MGM Mirage’s majority shareholder, would become the top gambling mogul in Las Vegas.
The combined companies would control about half of the 72,000 hotel rooms on the Strip. UBS Warburg analyst Robin Farley said MGM Mirage would own about 64 percent of the Strip’s high-end room market.