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It's Official - MGM and Mandalay Have Signed a Deal
MGM Mirage and Mandalay Resort Group today jointly announced that they have entered into a definitive merger agreement under which MGM Mirage will acquire Mandalay for $71.00 per share in cash, a premium of approximately 30% to Mandalay's closing share price on the day before MGM Mirage made its initial offer. The total value of the acquisition is approximately $7.9 billion, including equity value of approximately $4.8 billion, $600 million of convertible debentures and the assumption of approximately $2.5 billion in outstanding Mandalay debt. The combination will bring together two leading gaming resort operators to form a highly diversified hospitality company appealing to a broad spectrum of the leisure and business travel and event markets. Following the acquisition, MGM Mirage will own and operate 28 properties throughout Nevada, Mississippi, Illinois, Michigan and New Jersey. The combined company will have an asset portfolio that includes Bellagio, MGM Grand Las Vegas, The Mirage, Mandalay Bay and Circus Circus. These properties cater to a broad customer base, ranging from value-oriented to ultra high-end and chic, and each provides a unique customer experience. Following completion of the transaction, MGM Mirage will also own the fifth largest convention center in the U.S., providing the opportunity to further develop Las Vegas as a significant convention alternative for consumers.
Terry Lanni, Chairman and Chief Executive Officer of MGM Mirage, said, "This acquisition will create the world's leading gaming and leisure company with an unmatched portfolio of resorts. Mandalay is an outstanding franchise with top-notch properties that complement MGM Mirage's existing footprint as well as brands that are recognised and respected worldwide. The company also has an extremely talented and motivated group of employees, and we are excited to have them join our team. As our industry becomes increasingly competitive, and our company evolves into a multi-faceted entertainment, business and hospitality franchise, this transaction will allow us to serve the ever-growing needs of our customers with outstanding gaming, lodging, dining, entertainment and convention assets." The transaction is subject to the approval of Mandalay shareholders and to the satisfaction of customary closing conditions contained in the merger agreement, including the receipt of all necessary regulatory and governmental approvals. MGM Mirage anticipates the transaction will be completed by the first quarter of 2005.
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