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

Feds Eye MGM Mirage-Mandalay Union

MGM Mirage's (MGG) merger with Mandalay Resort Group (MBG) will have to hop through another hurdle, after the Federal Trade Commission asked the duo to provide more information related to their $4.8 billion merger deal.

The companies said they would comply promptly with the FTC's second request for information, which was announced Monday morning, and anticipated the deal would close sometime in the first quarter of 2005, in line with its earlier guidance. News of a second request from the FTC is unsurprising, given the size and scope of the transaction, the concentration of properties it would create on the Las Vegas Strip and the consolidation going on in the industry.

All told, the combined companies would own 28 gaming properties, 10 of which can be found on the Las Vegas Strip, giving it near-complete control over a three-mile stretch of properties, concentrated mainly on the city's west side. According to research from UBS, MGM would control 48% of the gaming positions, 46% of the square footage and 49% of the hotel rooms on the Las Vegas Strip.

With so much concentration in one place -- and with Harrah's Entertainment's (HET) planned acquisition of Caesars Entertainment (CZR - Get Report) creating a rival behemoth -- there are a number of antitrust concerns over both mergers. Already, MGM will have to sell a property in Detroit, where the combined companies would own two casinos, which violates gaming regulations.

More asset sales could be forced as well, depending on how the FTC defines competition. MGM has vowed to keep its properties on the Strip, arguing that the growing market is rife with competitors like Wynn Resorts (WYNN - Get Report), which will open the 3,500-room Wynn Las Vegas in April 2005, and Sheldon Adelson, who plans to grow his Las Vegas empire beyond the Venetian Hotel & Casino.

1 of 2

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
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!
SYM TRADE IT LAST %CHG
MBG $27.37 -0.29%
CZR $9.72 -2.80%
WYNN $128.02 -0.72%
AAPL $126.98 -0.49%
FB $84.38 1.60%

Markets

DOW 17,999.14 -35.79 -0.20%
S&P 500 2,100.33 -0.07 -0.00%
NASDAQ 5,015.3120 +20.71 0.41%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs