Updated from 7:50 a.m. EST

After nearly two weeks of public negotiations,

Stephen A. Wynn has finally agreed to sell

Mirage Resorts

(MIR)

to

MGM Grand

(MGG)

, the rival casino chain controlled by the billionaire Kirk Kerkorian.

In a deal valued at $4.4 billion, the companies said Monday that Mirage shareholders will receive $21 a share in cash for their holdings. MGM will also absorb $2 billion in debt.

Shares of Mirage climbed 2 11/16, or 16.9%, to close at 18 9/16. MGM's shares rose 1/2, or 2.6%, to 19 1/2.

The price for Mirage is $1 to $2 a share higher than the ceiling set by some analysts. During the negotiations, some Wall Street firms had predicted the acquisition would become dilutive to MGM earnings if Mirage's stock price hit 19 or 20 and forced MGM to raise its bid.

The agreement was reached two days before the deadline MGM set on its original $17-a-share offer.

Just 12 days ago, investors valued Wynn's company at 10 7/8 a share, making the final price just shy of a 100% premium for Mirage shareholders. Mirage rejected the $17-a-share bid last Tuesday, calling it inadequate and not in the best interest of shareholders.

Four dollars more a share satisfied Wynn, however: "This extraordinary transaction fully embraces the value of the franchise created by Mirage properties and the contribution made by the 32,000 individuals who are responsible for that franchise," he said in a statement.

The companies expect the purchase to close in the fourth quarter of 2000. MGM said it expects the deal will immediately add to earnings. The company again said it has secured complete financing for the deal, an assurance it first made to Mirage in an unusual reminder letter sent to Wynn during negotiations.

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This time, the reminder was intended for MGM shareholders, assuring them the company "contemplates a capital structure that preserves its investment grade rating," according to a statement.

The agreed-upon terms differ from MGM's original bid in financing as well as price. A Feb. 23 letter to Wynn from J. Terrence Lanni, MGM's chairman, gave Mirage shareholders a choice between accepting all cash or $10 of the $17 per share offer in MGM stock.

The combined companies would control much that glitters on the Las Vegas strip: MGM Grand, Bellagio, Mirage, New York-New York, Treasure Island and half of Monte Carlo. Outside Nevada, MGM has resorts in Detroit and Australia, while Mirage owns the Beau Rivage in Mississippi.

The companies both own undeveloped property in Atlantic City, including Mirage's large tract in the Marina area. Mirage settled a legal battle with

Trump Hotels & Casinos

(DJT)

over development in the area on Feb. 23.

During the negotiations, there was some speculation that

Park Place Entertainment

(PPE)

,

Harrah's

(HET)

or even Trump Hotels & Casinos would offer a competing bid. Most analysts had dismissed those rumors as indicative of little more than investment bankers' hunger for a piece of the casino deal action.

In morning trading, shares of Harrah's were up 3/8, or 2%, to 19 7/16, Park Place Entertainment was up 1/4, or 2%, to 12 and Trump was flat at 3 1/16.

The deal needs approval from Mirage's shareholders, though most analysts agree that Wynn's board of directors will follow his lead. The chairman, who built Mirage from scratch over 30 years, controls more than 11% of the votes.

Obtaining regulatory approval is always a dicey proposition in the tightly monitored casino industry, but MGM has cleared the first hurdle simply by patiently keeping its offer friendly despite Mirage's contentious initial response.

Nevada law requires a company's board of directors to approve any outsider's purchase of 10% or more of a company's stock. Those rules also make a competing bid unlikely.