MGM Mirage outlines deal to regulators

Liz Benston and Richard N. Velotta

Tuesday, Feb. 22, 2005 | 10:56 a.m.

Billionaire financier Kirk Kerkorian was in attendance at today's Gaming Control Board hearing considering his MGM Mirage's $7.9 billion purchase of Mandalay Resort Group.

Kerkorian sat with the company's top executives while Chairman and Chief Executive Terry Lanni outlined the company's plans to state regulators.

Company executives said the combined company will divide Mandalay's properties among the company's two casino operating groups, MGM Grand Resorts and Mirage Resorts.

Bobby Baldwin, president and CEO of Mirage resorts, will oversee Bellagio, CityCenter, Mirage, Beau Rivage, Treasure Island, New York-New York, Monte Carlo, Circus Circus Las Vegas and Circus Circus Reno, Gold Strike Tunica, Boardwalk, and the Silver Legacy in Reno.

John Redmond, president and CEO of MGM Grand Resorts, will oversee MGM Grand; Luxor; Mandalay Bay; the Primm Valley Resorts; Excalibur; Edgewater and Colorado Belle in Laughlin; Nevada Landing and Gold Strike in Jean; Railroad Pass, MGM Grand or MotorCity Casino -- whichever is not sold -- in Detroit; Borgata in Atlantic City and Grand Victoria in Illinois.

None of the Mandalay executives will stay on at the senior executive level, MGM Mirage bosses said. Lanni remains chairman and chief executive. All senior executives with MGM Mirage will retain their titles with the company.

Jim Murren remains president and chief financial officer and Gary Jacobs remains executive vice president/general counsel.

The state Gaming Control Board was slated to begin debating the $7.9 billion marriage; only two voting regulators heard testimony from executives of the companies.

Board members were expected to vote on their recommendation to the Nevada Gaming Commission later today in what is considered the last major hurdle for the deal's completion.

Commission Chairman Dennis Neilander and board member Bobby Siller were scheduled to pose questions on the deal. The board's third member, freshly appointed Mark Clayton, said when he took the office that he would not participate in either the MGM Mirage-Mandalay decision or the proposed deal between Harrah's Entertainment Inc. and his former employer, Caesars Entertainment Inc.

In a unanimous vote last week, the Federal Trade Commission approved the deal that would put almost half the Strip's nearly 75,000 hotel rooms under one company's ownership. MGM Mirage has said that it hopes to complete the deal by the end of March.

Regulators were expected to question executives about the multiple licensing of properties -- under the so-called Regulation 3.070 -- and the effects of the acquisition on the market share for the total numbers of slot machines, table games, gross revenue, available rooms, employees hired and total payroll.

The board is expected to examine the effects of the deal on suppliers and employees and whether the acquisition would create a potential monopoly.

Today's recommendation will be considered by the Nevada Gaming Commission in a special meeting Thursday afternoon.