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MGM MIRAGE and Mandalay Sign Definitive Agreement

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

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 recognized 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

“Today’s announcement is the culmination of the hard work and dedication
of our management team, who built Mandalay Resort Group into a premier
company in destination entertainment,” said Mike Ensign, Mandalay’s
Chairman and Chief Executive Officer. “We believe this outstanding
combination delivers the full value of our franchise to our shareholders
and creates growth opportunities for Mandalay employees. We will devote
ourselves to a rapid and smooth integration of the two companies. The new
company will prove an influential factor in the future of American

Jim Murren, President, Chief Financial Officer and Treasurer of MGM MIRAGE
said, “This combination will create a well-capitalized company that will
generate significant free cash flow enabling it to further invest in our
current portfolio of resorts as well as in new domestic and international
growth opportunities. We strongly believe the opportunities arising from
this acquisition can create a meaningful increase in long-term value for
MGM MIRAGE shareholders. We are clearly bullish on Las Vegas and its
potential, and believe the combination will better position us to meet the
needs of a broad range of customers in an increasingly competitive
regional and national gaming marketplace.”


MGM MIRAGE expects the acquisition to be immediately accretive to earnings
per share before synergies and that it will increase free cash flow. Pro
forma 2003 revenues for the combined company are $6.5 billion, and MGM
MIRAGE will be represented by more than 70,000 employees throughout the

Under the terms of the transaction, Mandalay will terminate its quarterly
dividend, but the $0.27 per share dividend declared on June 2, 2004, will
be paid on August 2, 2004, as previously announced.

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.

Bank of America Corporation, Citigroup Inc., Deutsche Bank AG, JPMorgan
Chase & Co. and Societe Generale Group acted as financial advisors and
Morgan Stanley provided a fairness opinion to MGM MIRAGE. Christensen,
Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP and Fried, Frank,
Harris, Shriver & Jacobson LLP served as legal counsel to MGM MIRAGE.
Merrill Lynch & Co., Inc. served as financial advisor and Cravath, Swaine
& Moore LLP served as legal counsel to Mandalay Resort Group.

Conference Call/Webcast

MGM MIRAGE and Mandalay Resort Group management will host a conference
call and webcast for the investment community on Wednesday, June 16, 2004
at 11:00 a.m. ET/8:00 a.m. PT to discuss their merger agreement announced
today. To participate in the conference call, please dial 888-889-2497
(within the U.S.) or 973-935-8504 (outside the U.S.) fifteen minutes prior
to the start of the call. A playback of the conference call will be
available following the call. To access the playback, please dial
877-519-4471 (within the U.S.) or 973-341-3080 (outside the U.S.) and
enter reservation number 4881692. A live webcast of the conference call
will also be available online at