MGM Grand, Inc. (NYSE: MGG) and Mirage
Resorts, Incorporated (NYSE: MIR) today announced that their respective Boards
of Directors have approved a definitive merger agreement, under which MGM
Grand (the “Company”) will acquire all of the outstanding shares of Mirage
Resorts for $21 per share in cash. The transaction will have a total equity
value of approximately $4.4 billion. In addition, MGM Grand will assume the
outstanding debt of Mirage Resorts of approximately $2.0 billion.
The transaction is subject to the approval of Mirage shareholders and to
the satisfaction of customary closing conditions contained in the merger
agreement, including the receipt of all necessary regulatory and governmental
approvals and is not subject to financing. The transaction will be accounted
for as a purchase; the companies anticipate the transaction will be completed
during the fourth quarter of 2000.
MGM Grand expects that the acquisition will be accretive to earnings per
share immediately, and increasingly accretive in subsequent years. The
Company noted that it has financing commitments to fund the entire acquisition
cost, and is committed to maintaining the strongest possible balance sheet.
Accordingly, MGM Grand contemplates a capital structure that preserves its
investment grade rating, and expects that combined debt levels will be reduced
through free cash flow and the sale of non-strategic assets.
J. Terrence Lanni, Chairman of MGM Grand, said, “As a result of this
acquisition, MGM Grand will have achieved a dream combination of assets and
people, a combination that creates unquestionably the premier company in the
gaming industry. This transaction provides Mirage shareholders with a
significant premium for their shares. We strongly believe that the revenue
enhancements and cost reduction opportunities arising out of this acquisition
will create a meaningful increase in the value of MGM Grand stock.”
Stephen A. Wynn, Chairman, President and Chief Executive Officer of Mirage
Resorts, said, “This extraordinary transaction fully embraces the value of the
franchise created by each of the Mirage properties and the contribution made
by the 32,000 individuals who are responsible for that franchise.”
MGM Grand expects significant cost savings to be achieved primarily
through increased purchasing power and the avoidance of duplicate facilities
and functions. In addition, substantial revenue growth is anticipated from
the unparalleled array of accommodations, entertainment, dining, shopping,
gaming, and sports and leisure experiences that will be available to the
Company`s customers and guests.
The acquisition of Mirage Resorts by MGM Grand marries the most admired
assets in the gaming industry. The Company will own and operate the finest
portfolio of 14 resorts including, in Nevada: MGM Grand - “The City of
Entertainment,” Bellagio, Mirage, New York - New York, Treasure Island, a 50%
interest in Monte Carlo, Golden Nugget - Las Vegas, Whiskey Pete`s, the Primm
Valley Resort, Buffalo Bill`s, and Golden Nugget - Laughlin; in Detroit: MGM
Grand Detroit Casino; in Mississippi: Beau Rivage; and in Australia: MGM
Grand Darwin. This stellar collection of trophy properties, along with the
extensive undeveloped acreage in Nevada, New Jersey, and Mississippi, provides
the Company with outstanding growth opportunities in the future.
MGM Grand, Inc. is an entertainment, hotel and gaming company
headquartered in Las Vegas, Nevada. MGM Grand, Inc. owns and operates: the
MGM Grand Hotel and Casino - The City of Entertainment and New York - New York
Hotel and Casino both located in Las Vegas; Whiskey Pete`s, Buffalo Bill`s and
the Primm Valley Resort in Primm, Nevada; the MGM Grand Detroit Casino in
Detroit, Michigan; the MGM Grand Hotel and Casino in Darwin, Australia;
manages casinos in Nelspruit, Witbank and Johannesburg, Republic of South
Africa; and owns two championship golf courses at the California/Nevada
stateline. MGM Grand is in the early stages of developing a permanent hotel
and casino complex in Detroit, Michigan. The Company also has announced plans
to develop a hotel and casino resort in Atlantic City, New Jersey.
Mirage Resorts, Incorporated is a leading owner, developer and operator of
casino-based resorts. Mirage owns and operates five casinos in Nevada: the
Bellagio, Mirage, Treasure Island, Golden Nugget - Las Vegas, Golden Nugget -
Laughlin, and the Beau Rivage casino in Biloxi, Mississippi. Mirage also owns
the Holiday Inn Casino Boardwalk and has a 50% interest in the Monte Carlo
Resort & Casino. For more information on Mirage Resorts, Incorporated, visit
our website at http://www.mirage.com.