MGM buys Mirage for $4.4 billion

LAS VEGAS - Casino giant MGM Grand, Inc. is buying rival Mirage Resorts, Inc. for $4.4 billion cash in a deal that appears to leave flamboyant Mirage chairman Steve Wynn on the sidelines.

The merger, announced Monday, creates what one casino analyst described as ''a juggernaut of a company'' with 14 properties and about 1,000 acres of land for development in three states.

The assets range from Mirage's $1.6 billion Bellagio resort to MGM's 5,005-room MGM Grand, the nation's largest hotel. MGM also assumes $2 billion in Mirage debt.

Executives of the two companies wrapped up the deal at dawn Monday after extensive negotiations that began Thursday in a meeting between Mirage president Bobby Baldwin and MGM Grand executives in Los Angeles.

The deal was struck after Baldwin asked MGM to up the ante $1 billion to $21 a share. MGM had offered $17 a share, or $3.3 billion, on Feb. 23 but had been rebuffed by Mirage's board.

MGM executives agreed to the current deal after the stock market closed Friday, and intensive negotiations continued through the weekend on details.

The transaction must be approved by Mirage stockholders and is expected to close by the end of the year.

Some on Wall Street had speculated that Wynn would play a role in the new company. While he has a hands-on, flashy style, billionaire Kirk Kerkorian, MGM's majority stockholder, keeps to the background.

But two sources familiar with the negotiations who requested anonymity told The Associated Press that Wynn would not remain with the merged company.

Jason Ader, a casino analyst with Bear, Stearns & Co., said he'd been told by MGM executives that Wynn ''would not be involved in operations'' in the new company.

''Steve's at the point in his life when he's considering pursuing other options,'' Ader said. ''He'll always be the chairman of Las Vegas and the casino industry.''

Wynn, 58, owns 23 million shares of Mirage stock or 12 percent of the company. The deal would bring him $483 million.

Wynn did not immediately return a telephone call; a Mirage spokesman said Wynn would not speak to the media.

J. Terrence Lanni, chairman of MGM Grand, said the acquisition gives MGM ''a dream combination of assets and people, a combination that creates unquestionably the premier company in the gaming industry.''

In a statement, Wynn said the deal ''fully embraces the value of the franchise created by each of the Mirage properties.''

It is expected the new company will retain the MGM name.

The combined companies will include 14 properties. Mirage owns the Bellagio, Mirage, Treasure Island and Golden Nugget resorts in Las Vegas, Beau Rivage in Biloxi, Miss. and the Golden Nugget in Laughlin, Nev. The company also owns half interest in the Monte Carlo hotel-casino here.

MGM Grand's properties include the MGM, New York-New York, three properties at Primm, Nev. and casinos in Detroit and Darwin, Australia.

The two companies also have extensive undeveloped acreage in Nevada, New Jersey and Mississippi.

Marvin Roffman, an industry analyst with Roffman Miller Associates, said the merger would give MGM ''a major part of the Strip and control of a major part of the hotel base. It would also give them an entree to Atlantic City,'' where Mirage is developing a megaresort.

Wynn started the megaresort boom here with the opening of the flagship Mirage in 1989, sparking a casino splurge that made Las Vegas the fastest-growing city in the nation.

Kerkorian built what was the largest hotel in the world here three times - first the International, which is now the Las Vegas Hilton; the former MGM Grand, now Ballys-Las Vegas, and the current MGM Grand, the world's largest when it opened in 1993.

In late trading, shares of Mirage jumped $2.68 to $18.56 on the New York Stock Exchange, where MGM's stock was up 43 cents at $19.43.

On the Net: MGM Grand site is http://www.mgmgrand.com.

Mirage's site is http://www.mirage.com