Mandalay purchase expected to close today

By Liz Benston (contact)

Monday, April 25, 2005 | 10:45 a.m.

MGM Mirage is expected to close its historic $7.9 billion buyout of Mandalay Resort Group by this afternoon, welcoming the Mandalay properties into the fold, company officials said this morning.

The company will have 28 casinos worldwide and control about half of the Strip resort market, including most of the properties on the west side of Las Vegas Boulevard.

Analysts initially raised anti-trust concerns but MGM Mirage successfully argued that the company's concentration of Las Vegas resorts wouldn't hurt competitors would allow it to compete more effectively against emerging resort markets in other states and countries.

MGM Mirage was only forced to sell one casino of the combined entity to satisfy Michigan law preventing any company from owning more than one casino in Detroit.

The Federal Trade Commission and Nevada regulators each signed off on the deal in February.

The company initially hoped to close the deal by the end of March but the recent appointment of three new members to the Illinois Gaming Board delayed the purchase by a few weeks so regulators could have more time to consider the a transaction connected with the deal.

Illinois regulators Thursday removed the final hurdle to the deal, approving the transfer of Mandalay's 50 percent interest in a riverboat casino to an escrow account that will be reviewed at a later date. The other half of the Grand Victoria riverboat in Elgin, northwest of Chicago, is owned by the Pritzker family.

Michigan regulators April 13 approved the purchase of Mandalay's 53.5 percent stake in a Detroit casino. MotorCity Casino, one of three Detroit casinos, was sold for $525 million to Detroit businesswoman Marian Ilitch. MGM Mirage still owns the MGM Grand Detroit casino.

MGM Mirage previously announced that the company would retain its executive team and that the Mandalay properties would be divided up between MGM Mirage's two operating units, MGM Grand and Mirage Resorts.

Some property chiefs will be shifting or leaving their posts. Lorenzo Creighton, formerly of Caesars Entertainment Inc.'s Flamingo, will become president of MGM Mirage's New York-New York resort and Renee West, president of the company's Primm properties, will assume that post at an as-yet undisclosed Strip resort.