MGM Grand, Mirage Merger Approved
LAS VEGAS (AP) _ MGM Grand Inc. formally acquired Mirage Resorts Inc. in a $4.4 billion deal that creates one of the largest hotel-casino companies in the world.
The Nevada Gaming Control Board and the Nevada Gaming Commission approved the acquisition in a special three-hour meeting Tuesday, just 84 days after business icon Kirk Kerkorian engineered the deal.
Kerkorian said it was a ``shocker″ that the deal had come together so quickly after it was announced March 6.
``It was really faster than I ever thought it would be,″ said Kerkorian, a billionaire whose business interests include ownership of Metro-Goldwyn-Mayer studios and a stake in DaimlerChrysler.
The commission approved the acquisition 5-0, the final regulatory step for approval.
The regulators met shortly after Mirage stockholders held their final meeting and approved the acquisition overwhelmingly. Stockholders will receive $21 a share for each share of Mirage stock, which had dipped below $11 when Kerkorian made his offer move in February.
In the meeting, Mirage founder and chairman Steve Wynn expressed few regrets, saying he was eager to move down the Strip to the Desert Inn hotel-casino, which he has agreed to buy for $270 million. That deal is expected to be completed next month.
Wynn was Mirage’s largest stockholder with 23 million shares, giving him about $483 million from the sale.
As part of the deal, MGM also assumes some $2 billion in Mirage debt.
The combined company will own 18 properties on three continents, J. Terrence Lanni, MGM Grand chairman, told casino regulators.
``This brings two of the great companies in the world together,″ Lanni said. ``This is a case where one and one is more than two.″
He said with the diminished number of markets opening up to legalized gambling, ``we had no choice but to grow by acquisition.″
James Murren, president and chief financial officer of MGM, said there were no plans to sell off any revenue producing assets such as hotel-casinos. The two companies can save ``tens of millions of dollars″ by combining some operations, he said.
Regulators said they expected the combined companies to be good for Nevada’s casino industry.
``It causes the others to pedal faster,″ Gaming Control Board member Bobby Siller said.
MGM executive board member Alex Yemenidjian, a Kerkorian confidante and chairman of Metro-Goldwyn-Mayer, said a major focus of the new company will be 55 acres of prime Strip land acquired in the Mirage deal. He said when the company develops the land between the Bellagio and Monte Carlo resorts the results will be ``spectacular.″
``It won’t be just another hotel,″ Yemenidjian said. ``It will totally redefine the entertainment experience as we know it. It will take MGM to another level.″
MGM stock closed Tuesday at 33.813, up 50 cents, or 1.5 percent.
The merger of MGM, with 19,000 employees, and Mirage, with 30,000, will make the combined company the largest employer in Nevada.
The two companies have combined annual revenues of $4.2 billion and cash flow of $1.2 billion, Lanni said. By comparison, Park Place Entertainment Corp. with such properties as Bally’s and Hilton, had revenues of $4.6 billion last year, including results from Caesars, which it took control of Dec. 29.