This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

MGM Mirage and Mandalay Seal Vegas Wedding

Updated from 7:50 a.m. EDT

The $7.9 billion cash-and-debt deal between MGM Mirage (MGG) and Mandalay Resorts Group (MBG) is so large that its impact can even be seen from Las Vegas' street corners, where the combined company dominates the world's largest gambling market.

As expected, the merger of MGM, the third-largest U.S. gaming company, and Mandalay, the fourth-largest, was unanimously approved by the boards of both companies. Under the terms of the deal, MGM bought Mandalay for $4.8 billion in cash, or $71 a share, up from an earlier offer of $68 a share, with the assumption of $2.5 million in debt and $600 million in convertible debentures. MGM said it expects the transaction to be completed by the end of the first quarter of 2005.

"This acquisition will create the world's leading gaming and leisure company with an unmatched portfolio of resorts," said Terry Lanni, chairman and CEO of MGM. "Mandalay is an outstanding franchise with top-notch properties that complement MGM Mirage's existing footprint as well as brands that are recognized and respected worldwide."

Barring any asset sales and pending regulatory approval, MGM and Mandalay have a combined 28 properties -- 10 of which can be found on the Las Vegas Strip, giving it near-complete control over a three-mile stretch of gaming, concentrated mainly on the west side. Eight of the 10 casinos between Treasure Island and the Mandalay Bay casino belong to MGM. Caesars Entertainment's (CZR - Get Report) flagship casino, situated between the Mirage and Bellagio, remains the lone oasis of non-MGM gaming on one side of the street.

"We are clearly bullish on Las Vegas and its potential," said Jim Murren, CFO of Mirage, "and believe the combination will better position us to meet the needs of a broad range of customers in an increasingly competitive regional and national gaming marketplace."

According to research from UBS, MGM now controls 48% of the gaming positions, 46% of the square footage and 49% of the hotel rooms on the Las Vegas Strip. But, depending on how the deal is financed, the acquisition could come at the expense of shareholders and future earnings potential. MGM hasn't revealed details about the deal, but said on a conference call that the full merger agreement would be released next week.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
MBG $26.97 0.41%
CZR $6.28 2.11%
MGM $19.05 4.27%
WYNN $111.35 7.19%
AAPL $125.69 -0.25%

Markets

DOW 17,776.91 +93.33 0.53%
S&P 500 2,081.34 +12.58 0.61%
NASDAQ 4,997.4590 +5.5190 0.11%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs