MGM Grand purchase of Mirage ahead of schedule

Monday, May 1, 2000 | 11:10 a.m.

Steve Wynn's agreement to purchase the Desert Inn signaled that Mirage Resorts Inc.'s acquisition by MGM Grand Inc. could close sooner than anyone expected.

Wynn is expected to close on the $270 million acquisition of the Desert Inn "no later than June 30, 2000," said Starwood Hotels & Resorts Worldwide Inc.'s Friday press release.

But the deal is conditioned on the completion of the $6.7 billion Mirage Resorts-MGM Grand merger -- sending a message that the largest merger in gaming industry is expected to close just four months after it was first announced.

"Based on how this process has been moving forward, we would see no reason why this merger can't be complete by the end of June," said Alan Feldman, Mirage Resorts spokesman.

When originally announced March 6, MGM Grand said the deal would close by the end of the year. The company is now targeting the third quarter, but is acknowledging the end could come sooner.

But in keeping with their conservative style, MGM Grand officials refuse to make any promises.

"It is out of anyone's control," said Jim Murren, MGM Grand president and chief financial officer. "Anyone that makes an estimate of a closing date is doing just that (estimating). We had a thousand things to do, and now we only have six.

"We've been moving at light speed over here, and surprising people, I think, in terms of speed."

All that remains, Murren said, is to receive approvals from gaming regulators in Nevada and Mississippi, as well as the support of a majority of Mirage Resorts shareholders. Nevada and Mississippi are expected to make decisions later this month, though Mirage Resorts' shareholder meeting has yet to be scheduled.

Meanwhile, MGM Grand -- led by Murren -- has already arranged all of the financing necessary to pull off the deal.

"We're in the business of underpromising and overdelivering," Murren said. "I don't know when we'll close. Obviously, we want to close sooner rather than later. The sooner we can close Mirage ... the sooner we can get access to its earnings and cash flow, and that can only be good for MGM stock.

"There's tens of millions of dollars in profit we'll have in consolidation by closing this earlier. I don't think there's anyone out there that doesn't think this isn't a good transaction now."