Wynn to buy some Bellagio art

David Strow

Tuesday, May 16, 2000 | 10:59 a.m.

Outgoing Mirage Resorts Inc. Chairman Steve Wynn is apparently willing to match all outside offers to acquire the Bellagio artwork earmarked for sale by MGM Grand Inc., a Mirage spokesman said Monday.

Mirage Chief Financial Officer Bobby Baldwin told attendees of the Southern Gaming Summit in Biloxi, Miss., last week that Wynn intended to purchase the art being sold by MGM Grand, said Mirage spokesman Alan Feldman. MGM Grand is expected to sell more than two-thirds of the art owned by Mirage, a collection valued at $200 million.

"It is my understanding that MGM is in negotiation with several parties, including Mr. Wynn, concerning the purchase of most of the collection," said Feldman, who attended the Biloxi summit with Baldwin. "As far as I know, Steve will be the buyer."

Feldman also said Wynn plans to remove his half of the art collection -- valued at $200 million -- from the Bellagio once the merger is complete.

A Mirage press release issued Friday says MGM Grand intends to close the Bellagio Gallery of Fine Art and then convert it into a site "at which touring exhibits and long-term loan exhibits will be displayed."

Feldman said he didn't know if Wynn planned to display the art in the Desert Inn, which he plans to acquire from Starwood Resorts and Hotels Worldwide for $270 million. On Friday, Mirage announced Wynn planned to remove his half of the collection from the Bellagio once the sale was complete.

Wynn holds a huge advantage in any bidding war for the art, since MGM Grand must offer him the right to purchase any artworks from the collection at the same price offered by an outside party.

According to Mirage documents filed with the Securities and Exchange Commission, Wynn could also purchase the art at the book value of the art piece or the appraised value of the piece, whichever is higher. This right would apply even if the alternative price was below that offered by an outside party, though Mirage officials have insisted the deal won't result in below-market deals for Wynn.

This clause is the subject of a lawsuit filed by New York-based Crandon Capital Partners, a shareholder in Mirage. The lawsuit is attempting to invalidate Wynn's right to buy the art at an alternative price.

Crandon has asked a state judge to place proceeds from art sales into a constructive trust until the validity of Wynn's agreement can be ruled on, a motion state Judge Nancy Saitta is expected to rule on May 22.

Feldman said no art will be sold until MGM Grand has closed on its $6.4 billion acquisition of Mirage. However, the deal may close as early as this month, assuming the deal receives the endorsement of Nevada gaming regulators and Mirage shareholders on May 30.