MGM-Mandalay Merger Delayed - TheStreet

Investors cashed in their

MGM Mirage


chips Wednesday after the casino company announced a delay in its acquisition of

Mandalay Resort Group



The companies said they now expect to close the $7.90 billion deal by June 30, up to three months later than previously forecast.

The casino operators noted that last week's appointments of new members to the Illinois Gaming Board allow the state body to review the merger. Previously, the board had lacked sufficient members to conduct business since last August, and before the recent appointments, Mandalay was expected to put its Illinois casino in escrow, allowing the merger to proceed without the state's approval.

Shares of MGM Mirage were off $2.26, or 3%, at $73.

Mandalay shares fell only 26 cents, or 0.4%, to $70.50. The stock has proved resilient, because holders will receive $71 a share in cash when the merger closes.

Also Wednesday, the company's announced

Mandalay reached a deal to sell its stake in a Detroit casino, removing another hurdle to the merger's consummation. Federal and Nevada regulators have already signed off on the deal, so Illinois approval remains the last potential obstacle.

Under the deal, MGM Mirage will pay $4.8 billion in cash for the Mandalay shares. It will also assume $2.5 billion in debt and $600 million in convertible securities.