Analyzing the MGM Mirage Mandalay Casino Merger

Analyzing the MGM Mirage Mandalay Casino Merger

In June of 2004, in an attempt to capture the resurgent popularity and profitability of Las Vegas, billionaire Kirk Kerkorian’s MGM Mirage announced a bid to buy rival Mandalay Resort Group, a deal, if successful, which would turn his casino company into an unprecedented giant. MGM-Mirage’s offer was $68 a share, or $4.85 billion, plus the assumption of $2.8 billion in debt, which would make the merger the largest acquisition in the casino industry.

If the merger passes the scrutiny of government anti-trust regulators, Mr. Kerkorian would dominate the Las Vegas Strip, just as it experiences a revival. He would control more than half of the 72,000 hotel rooms on the famous boulevard and most of…