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Last Updated: Wednesday, 16 June, 2004, 05:20 GMT 06:20 UK
Casino giant created in Las Vegas
Mandalay Bay hotel
A takeover would see MGM control about 50% of Las Vegas's hotels
MGM Mirage's $7.9bn (4.4bn) bid for rival casino firm Mandalay Resort has been accepted, paving the way for the creation of a new dominant operator

The new company would own 28 casinos in Nevada, Mississippi, Michigan and Illinois, and half the Borgata hotel-casino in Atlantic City, New Jersey.

It would also control 50% of the Las Vegas Strip hotel market, and a third of the gambling capital's casinos.

The new group is expected to clock up revenues of $6bn a year.

But first the deal between will need to be approved by the US Federal Trade Commission as well as by gambling regulators in all the states in which the two companies operate.

Analysts expect they will get it without having to make many concessions.

"If I had to bet a dollar today, I'd bet they'd prevail," said Banc of America Securities' J. Cogan, insisting that even after a deal, competition would still be harsh on the Strip.

Cash and shares

The deal is set to be the biggest yet between two gambling companies.

The last record was set in 2000 when Kirk Kerkorian paid $4.4bn for Steve Wynn's Mirage Resorts.

MGM's bid includes the $4.8bn cash offer which delivers a 30% premium on Mandalay's market value before bidding started

MGM will also take on $2.5bn of debts and $600m in bonds that are convertible to shares.

Mandalay gained 28 cents to close at $67.88 in New York on Tuesday, before the offer was accepted.

MGM Mirage gained $1.30 to close at $49.50.


SEE ALSO:
MGM Mirage ups bid for Mandalay
14 Jun 04  |  Business
MGM Mirage is on road to Mandalay
07 Jun 04  |  Business
MGM Mirage abandons Wembley race
05 May 04  |  Business
Las Vegas workers hit pay jackpot
31 Mar 04  |  Business
City bets on 250m casino project
03 Feb 04  |  South Yorkshire


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