Government to scrutinize $4.8 billion casino deal

  • Associated Press
  • Wednesday, June 16, 2004 9:00pm
  • Business

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.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Melrose and Vine Collective owner Kara Langus in her vintage collection room at her store on Friday, Jan. 5, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
New and vintage women’s boutique aims to dazzle in downtown Everett

Add some sparkle to your wardrobe: Melrose and Vine Collective opened inside a former bank building on Pacific Avenue.

Garry Clark, CEO of Economic Alliance Snohomish County. (Kevin Clark / Herald file)
CEO steps down at Economic Alliance Snohomish County

Garry Clark, who has led the nonprofit chamber of commerce for three years, is leaving to “seek new opportunities.”

Dan Bates / The Herald
When Seattle Genetics founder, Clay Siegall lost his father while in college, he switched from studying for an MD to studying for a PhD., and a goal to treat cancer patients.  His efforts are paying off in lives.
Ex-Seagen CEO to return to Bothell to lead newly relocated biotech firm

Clay Siegall, who resigned from Seagen over allegations of domestic abuse, is now CEO of cancer therapy developer Immunome.

Molbak’s Garden Cafe in Woodinville, Washington. Photographed in 2016. (Andrea Brown / The Herald)
‘Shocked and heartbroken’: Woodinville garden store Molbak’s to close

After 67 years, Molbak’s Home + Garden, a mainstay just across the county line, will cease operations early next year.

Good Cheer’s two thrift stores are great places to find Christmas decorations and other knick-knacks. (File photo by David Welton)
A guide to gift buying on Whidbey Island

Consider these unique gift idea suggestions from the South Whidbey Record and the Whidbey News-Times

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.