Illinois board removes last barrier in Mandalay buyout

Maura Kelly Lannan

Friday, April 22, 2005 | 11:15 a.m.

CHICAGO -- Illinois Gaming Board members on Thursday unanimously approved the transfer of interest in an Illinois riverboat casino, removing the last regulatory hurdle to the closing of MGM Mirage's $7.9 billion acquisition of Mandalay Resort Group next week.

Illinois regulators approved the transfer of Mandalay's 50 percent ownership in the Grand Victoria casino into an escrow account. The Elgin casino is the most profitable of the state's nine riverboat casinos.

John Redmond, president and chief executive of MGM Grand Resorts, said he was "ecstatic" about the approval.

"We've been doing this since June and we just can't wait to move forward," Redmond said.

MGM Mirage agreed in June to buy rival Mandalay for $4.8 billion in cash. It is also assuming $2.5 billion in debt and $600 million in convertible debentures in the deal.

The blockbuster deal would give MGM Mirage control of 24 properties in Illinois, New Jersey, Michigan, Mississippi and Nevada, including 11 megaresorts on the Las Vegas Strip.

The Federal Trade Commission approved the plan, but the Illinois Gaming Board was prevented for months from voting after resignations last August left the board one member short of a quorum. Gov. Rod Blagojevich waited seven months before appointing new members to the board.

The companies pushed back the closing date of their merger while they awaited approval from the Illinois regulators. The companies had hoped to finalize the deal in the first quarter of this year. The deal now is expected to close on Monday.