MGM Grand, Inc. (NYSE: MGG) and
Primadonna Resorts, Inc. (Nasdaq: PRMA) announced today that their respective
Boards of Directors have approved in principle MGM Grand`s acquisition of
Primadonna in an all stock transaction. The terms of the merger provide for
Primadonna`s stockholders to receive 0.33 shares of MGM Grand common stock for
each share of Primadonna stock held, or a total of approximately 9.5 million
shares of MGM Grand common stock. The transaction is subject to the execution
of a definitive merger agreement, Primadonna shareholder approval and the
satisfaction of various conditions to be contained in the merger agreement,
including obtaining certain regulatory approvals.
The parties expect to enter into a definitive merger agreement within two
weeks. The merger is expected to be completed in the first quarter of 1999.
Primadonna`s assets include three hotel/casino resorts in Primm, Nevada,
50% ownership of New York - New York Hotel and Casino in Las Vegas, Nevada,
and two world class golf courses. The Primm, Nevada hotel/casino resorts and
golf courses are located on approximately 590 acres of company-owned land in
California and Nevada, of which about 140 acres are undeveloped. In addition,
the company leases 142 acres of land in Nevada.
“The combination of Primadonna and MGM Grand affords us the opportunity to
take advantage of economies of scale, as well as the diversification of
revenues,” said J. Terrence Lanni, MGM Grand`s Chairman and Chief Executive
“This is a significant step toward our goal of creating a gaming and
entertainment giant,” said Alex Yemenidjian, MGM Grand`s President and Chief
“We believe that the merger is compelling for Primadonna`s shareholders.
By joining with MGM Grand, Primadonna`s shareholders will benefit from MGM
Grand`s financial strength and exciting growth prospects. The exchange
represents a premium for Primadonna, based on stock prices for Primadonna and
MGM Grand when negotiations commenced,” said Gary E. Primm, Primadonna`s
Chairman and Chief Executive Officer.
“We believe MGM Grand will continue to enjoy the strongest balance sheet
in the gaming industry after the merger. The transaction will be accounted
for as a purchase, and the acquisition will be immediately accretive to MGM
Grand`s earnings, even before taking into effect anticipated cost savings and
synergies,” said James J. Murren, MGM Grand`s Chief Financial Officer.
Morgan Stanley Dean Witter is advising Primadonna on this transaction.
Primadonna Resorts, Inc. is an entertainment, hotel and gaming company.
Primadonna owns Whiskey Pete`s, Buffalo Bill`s and the Primm Valley Resort in
Primm, Nevada, two championship golf courses in California, and a 50% interest
in New York - New York Hotel and Casino in Las Vegas, Nevada.
MGM Grand, Inc. is an entertainment, hotel and gaming company
headquartered in Las Vegas, Nevada. The Company operates the MGM Grand
Hotel/Casino in Las Vegas, the MGM Grand Hotel/Casino in Darwin, Australia and
owns a 50% interest in the New York - New York Hotel/Casino in Las Vegas,
Nevada. MGM Grand, Inc. manages casinos in Nelspruit, Witbank and
Johannesburg, South Africa. The Company plans to develop a temporary casino
in Detroit, Michigan, which is anticipated to open in the summer of 1999,
followed by a permanent hotel/casino resort thereafter. MGM Grand, Inc. also
has announced plans to develop a hotel/casino resort in Atlantic City, New
Statements in this release which are not historical facts are “forward
looking” statements and “safe harbor statements” under the Private Securities
Litigation Reform Act of 1995 that involve risks and/or uncertainties,
including risks and/or uncertainties as described in the Company`s Annual
Report on Form 10-K for the fiscal year ended December 31, 1997.