LAS VEGAS (AP) - Mandalay Resort Group directors have said yes to MGM Mirage's $4.8 billion cash buyout in a deal that would unite two of the world's biggest gambling companies and bring some of the most famous Las Vegas Strip properties under a single owner.
Now the gaming giants must persuade regulators to take a gamble on such a behemoth casino combination.
Jim Murren, MGM Mirage's president and chief financial officer, said his company's board was satisfied antitrust issues would not derail the deal as regulators began vetting it.
"We've become increasing comfortable ... that this poses no regulatory concern," Murren said in a telephone interview late Tuesday night. "We have excellent outside counsel and advisers and they have made the board of directors comfortable."
The board of Mandalay Resort Group Inc. approved the MGM Mirage Inc. offer after a seven-hour meeting that ended late Tuesday.
MGM Mirage's board approved the proposal earlier Tuesday after an exhaustive presentation to directors that lasted almost four hours.
The deal includes the assumption of $2.5 billion in Mandalay debt and $600 million in bonds that can be exchanged for stock in the company.
Glenn W. Schaeffer, Mandalay's president and chief financial officer, said there was no change in the deal's terms. The agreement also calls for a $160 million breakup fee if the transaction does not close.
The cash price represents a 30 percent premium to Mandalay's closing share price on June 3, the day before MGM Mirage's initial offer of $68 per share was disclosed.
Any such transaction would take months to complete. The deal must be reviewed by the Federal Trade Commission and gambling regulators in states in which the companies own casinos.
The deal would create a company with more than $6 billion a year in revenues and 28 casinos in Nevada, Mississippi, Michigan and Illinois. MGM Mirage also owns 50 percent of the Borgata hotel-casino in Atlantic City, N.J.
It would be the biggest merger between gambling companies ever, surpassing Kirk Kerkorian's $4.4 billion buyout of Steve Wynn's Mirage Resorts in 2000.
The two Las Vegas-based companies have been in friendly negotiations that unraveled Friday after MGM Mirage requested a 15-month option to pull out of the deal while retaining strategic control over Mandalay during the time period.
The companies regrouped over the weekend and salvaged the deal that will establish the largest casino company in the world and dominate the Las Vegas Strip with 11 properties.
Murren described the negotiations as "intense" and "spirited" with ample "jockeying" and "stiff-arming" taking place. He said the company started working on the blockbuster merger in May.
With the merger, the 87-year-old Kerkorian, MGM Mirage's majority shareholder, would become the top gambling mogul in Las Vegas.
The combined companies would control about half of the 72,000 hotel rooms on the Strip. UBS Warburg analyst Robin Farley said MGM Mirage would own about 64 percent of the Strip's high-end room market.
It also would have about 40 percent of the slot machines and 44 percent of the gambling tables on the Strip.
MGM Mirage would be required by Michigan law to sell either the MGM Grand Detroit Casino or Mandalay's MotorCity Casino in Detroit. Detroit's three licensed casinos must be separately owned.
On the Net:
MGM Mirage Inc.: http://www.mgmmirage.com
Mandalay Resort Group: http://www.mandalayresortgroup.com