Wynn confirms plan to move art to D.I.

David Strow

Tuesday, May 30, 2000 | 11:12 a.m.

Shareholders of Mirage Resorts Inc. voted in favor of their company's $6.4 billion acquisition by MGM Grand Inc. today, clearing the way for the deal's close Wednesday.

Mirage said 65 percent of Mirage shareholders voted in favor of MGM Grand's offer of $21 per share in cash. About 2 percent voted against the merger and the remainder didn't vote.

"It's history," said Mirage Resorts Chairman and CEO Steve Wynn, who's leaving the company after the merger and is personally buying the Desert Inn. "This company is now a part of MGM."

When asked about the closure of the Bellagio art gallery, Wynn said it "pulls on my heartstrings, because I have had kind of an emotional attachment to (the art)."

MGM Grand intends to sell much of the art. Wynn is the likely buyer.

"Next time you'll be able to see those paintings is at the Desert Inn or whatever it's called then. There will be a gallery," he said. "Meantime, they'll be at the house."

This was the first public confirmation by Wynn that he intends to buy the Bellagio art and move it to the D.I.

MGM Grand Chairman J. Terrence Lanni and Co-Chief Executive Dan Wade attended the shareholders' meeting at Mirage's Bellagio resort.

Shareholders were allowed to ask questions of Wynn.

One shareholder, who did not identify himself, said "I personally feel if we held the stock for under six months it would have been $30 per share."

Wynn responded, "It's not going to go up now," causing many in the audience to chuckle. "It's over. What you can do now is buy MGM shares."

Wynn noted the new company would be "two-thirds Mirage and one-third MGM."

"You haven't lost anything, you just have to change the name on the (stock) certificate."

A UNLV student asked Wynn if there will be an opportunity to invest in the new company Wynn will start at the D.I.

Wynn said "not at the moment, but you never say 'never.' It's a dot-com world and as long as that is the case ... I don't think I'd want to submit my assets to that measurement. But, if we go back to a more predictable stock market, I don't see any reason we couldn't be public someday."

The Nevada Carpenters Union said organizer Jim Sala was denied admittance to the meeting. The union, which claims to own 1.75 million Mirage shares through its pension fund, has been in an organizing battle at the Mirage hotel-casino and wanted to question executives at the meeting.

The union officials attempted to hand out a petition raising questions about Mirage's refusal to recognize the union.

"We had questions regarding the stock price and the poison pill. When you have that many shares you have some questions regarding it (the deal)," Sala said, adding some of his colleagues were forcibly kept out of the meeting.

"They don't own any shares. They had a copy of a proxy they tried to present that is not a valid method for entry to a shareholders' meeting," Mirage spokesman Alan Feldman said. "We have a non-solicitation policy at our shareholder meetings and they were in violation of that."

Few on Wall Street were surprised the deal passed without much difficulty.

"It would be very surprising if it wasn't approved at this point," said Joe Coccimiglio, gaming analyst with Prudential Securities. "An all-cash deal, given the current market conditions, is looking pretty good."

With the approval, the only hurdle remaining for the deal this morning was the approval of Nevada gaming regulators. The state Gaming Control Board was set to hold hearings on the merger at 10:30 this morning, followed by the Nevada Gaming Commission one hour later.

The only other regulatory body required to check off on the deal, the Mississippi Gaming Commission, voted unanimously in favor of the merger May 18.

If Nevada gaming regulators approve of the deal, as expected, the merger is expected to close sometime Wednesday.

Today's votes brought a climactic end to the gaming industry's largest deal ever -- one approved and closed less than four months after it was first announced.

MGM Grand first announced its interest in Mirage Resorts Feb. 23 with an unsolicited $17 per share offer for Mirage -- a pursuit many industry analysts and observers expected Wynn to fight. Wynn and the Mirage board did reject this offer within days as "inadequate," but surprised many by announcing they would be willing to listen to higher offers.

That kicked off talks between Wynn and MGM Grand controlling shareholder Kirk Kerkorian. In the early hours of March 6, the final details were hammered out, and the two companies jointly announced they'd reached a deal.

Since then, MGM Grand moved with blinding speed, arranging financing for the deal through debt and equity offerings.

"Contrast that to Caesars (World Inc.'s acquisition by Park Place Entertainment) ... that took nine months to close," Coccimiglio said. "This one was announced at the same time one year later, and was done in three months."