This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

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) 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

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs