Casino magnate weighing options after $4.4 billion Mirage buyout

Robert Macy

Monday, March 6, 2000 | 4:33 a.m.

As a 10-year-old boy, Steve Wynn stood on the fledgling Strip, mesmerized by the neon lights and the excitement of the meager collection of hotels that was Las Vegas in the early '50s.

He returned in 1967 to become the city's casino king, parlaying a land deal with Howard Hughes into a gambling bonanza that changed the industry.

Now his company has been gobbled up in a $4.4 billion merger with MGM Grand, Inc., and Wynn is said to be looking for new mountains to climb with the $483 million he made on the deal. It was just the latest of many over the years.

Wynn cut a deal with the late billionaire Hughes for a piece of land on the Strip in 1972, buying it for $1 million and later selling it to Caesars Palace at double the price. He then bought stock in downtown's Golden Nugget hotel before taking control of the company.

Wynn opened his flagship Mirage hotel-casino in 1989, sparking an unprecedented building boom on and off the Strip. Megaresorts became the destination of choice and Las Vegas became the nation's fastest-growing city.

Wynn opened the pirate-themed Treasure Island in 1993. His showplace, the $1.6 billion Bellagio with a $300 million art collection, opened in 1998.

Mirage Resorts, Inc. stock peaked at $26.38 in May 1999. But after the pricey Beau Rivage casino in Biloxi, Miss., failed to meet expectations, the stock dipped to $10.88 on Feb. 22.

MGM Grand swooped in the next day and made a $3.5 billion buyout offer - $17 a share. Though Wynn and his board rejected the offer, the door was open.

Sources close to the negotiations said Wynn called billionaire Kirk Kerkorian, MGM's majority stockholder, to tell him the deal was too low. The two gaming titans met once briefly and talked twice in the next few days, sources said.

MGM Chairman J. Terrence Lanni said Wynn would not be a part of the new company.

"He neither asked for a position in the combined company, nor did we offer him a position," Lanni told The Associated Press. "I think whatever Steve decides to do, he's going to be staggeringly successful."

Jason Ader, a casino analyst with Bear, Stearns & Co., said MGM executives told him that Wynn "would not be involved in operations."

"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's not talking about his plans. But his 23 million shares of Mirage stock, 12 percent of the company, provide options.

Marvin Roffman, a casino analyst with Roffman Miller Associates, said the stock deal means Wynn, 58, can pursue his two passions - collecting art and playing golf.

"And he won't have to put up with the insanity of Wall Street, with their short-term thinking," Roffman said. "For a guy with vision, he was out of favor with Wall Street.

"Wall Street considers anything longer than two months is like an eternity," Roffman said. "They want instant performance. When Mirage stock was in the tank, it was off with his head. Steve is the kind of guy who builds enduring kinds of properties. To do that, you have to go through some hiccups."

Wynn addressed that issue in a 1989 AP interview shortly before he opened Mirage.

Asked about his long-running feud with businessman Donald Trump, Wynn said he wanted to be known as "a hotel operator, not the star."

"I want people to say that Steve Wynn built the best hotel in the world. I don't want to say I own it. I want to be the guy that designed it. That's my edge."