Mirage shareholders sue over MGM takeover

Grace Leong

Wednesday, Feb. 23, 2000 | 4:24 a.m.

Five shareholders of Mirage Resorts Inc. filed class-action lawsuits Wednesday demanding that the interests of public shareholders be preserved as Mirage weighs an unsolicited $5.4 billion takeover offer from MGM Grand Inc.

In a Clark County District Court suit against Mirage and its board members, Crandon Capital Partners said it and other Mirage shareholders have been "deprived of the opportunity to realize fully the benefits of their investment in the company" because of Mirage management decisions.

Crandon Capital said Mirage board members have "wrongfully refused to properly consider a bona fide offer for the company from MGM Grand," thus breaching their fiduciary duty to maximize shareholder value.

Mirage has not rejected the MGM Grand offer, instead it said Wednesday its board would consider the proposal.

But the Crandon suit, filed by attorney Mark Albright, said the defendants "recalcitrance to consider MGM's offer has no valid business purpose and simply evidences their disregard for the attractive premium being offered to Mirage shareholders."

The suit seeks an order requiring Mirage directors to take appropriate steps to enhance Mirage's value as a merger/acquisition candidate, expose Mirage to the marketplace in an effort to create an active auction of the company and act independently so the interests of the shareholders are protected.

Four more shareholders suing Mirage were Janis Zvokel, Naline Yassin, J.M.M. Management Corp. and Richard Ardezzone.

Their suits, also filed by Albright, seek an order to force the Mirage board to disclose the true value of Mirage assets, its full earnings potential and expected increase in profitability. The plaintiffs say they would be deprived of the opportunity to obtain the real value of their holdings without such information.

These shareholders allege the Mirage board members have access to internal financial information about Mirage and are using their positions of power and control to better their interests at the expense of Mirage shareholders.

These shareholders say the Mirage board must act independently so the interests of Mirage public shareholders will be protected. They say the Mirage board must retain independent advisors and appoint a special committee of board members to consider the MGM Grand offer.